For those that would otherwise see significant increases in their rates liability, the Government has put in place a £2 billion transitional relief scheme to limit and phase in changes in rate bills as a result of the 2010 revaluation. To help pay for the limits on increases in bills, there also have to be limits on reductions in bills. Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate multiplier).
The scheme applies only to the bill based on a property at the time of the revaluation. If there are any changes to the property after 1st April 2010, transitional arrangements will not normally apply to the part of a bill that relates to any increase in rateable value due to those changes. Changes to a rate liability due to other circumstances (for example due to changes in the amount of small business rate relief) are not covered by the transitional arrangements.
The details of the caps on increases and decreases in the amounts a ratepayer would have to pay following the 2010 revaluation are as follows:
1) Limits on increases -The percentage a rate bill can increase by each year, prior to inflation, under the transitional arrangements set by government for the 2010 Rating List are as follows:
FINANCIAL YEAR RV LESS THAN £18,000 RV GREATER THAN £18,000
2010/2011 5.0% 12.5%
2011/2012 7.5% 17.5%
2012/2013 10.0% 20.0%
2013/2014 15.0% 25.0%
2014/2015 15.0% 25.0%
2) Limits on Decreases- The percentage a rate bill can decrease by each year, prior to inflation, under the transitional arrangements set by government for the 2010 Rating List are as follows:
FINANCIAL YEAR RV LESS THAN £18, 0000 RV GREATER THAN £18,000
2010/2011 20% 4.6%
2011/2012 30% 6.7%
2012/2013 35% 7.0%
2013/2014 55% 13.0%
2014/2015 55% 13.0%
The inflation factor to be applied to all rate bills subject to transitional arrangements for 2014/2015 will be 2%.
If you require any further information about the transitional arrangement scheme please contact the Business Rate Team on (01727) 819270