Chelmsford City Council

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Transitional relief scheme

The Valuation Office Agency revalued properties for 2017. As a result, the amount of Business Rates you need to pay could change.

To limit the effect of the changes, the government has introduced a transitional relief scheme. The transitional relief scheme means that both reductions and increases to bills will be brought in gradually, over as many as five years.

By limiting the reductions to bills in the short term, the government can help people who are facing increases in their bills.

The transition scheme only applies to the bill for properties present in the rating list on 1 April 2017.

We apply the transition relief automatically. You do not need to apply, and the relief will show on your bill.

For 2020/21, Business Rate increases are limited to:

  • 15% plus inflation for small businesses      
  • 25% plus inflation for medium businesses

  • 16% plus inflation for large businesses

For 2020/21, Business Rate decreases are limited to:

  • 55% less inflation for small businesses

  • 25% less inflation for medium businesses

  • 55% less inflation for large businesses

 

Calculating bills

To calculate Business Rates bills, we multiply the base liability by the appropriate fraction. This depends on the appropriate fraction category, and whether the bill is increasing or decreasing. The base liability is usually the full charge for last year.

 

Appropriate fraction categories

There are three categories for businesses, which we use to decide which appropriate fraction we should be using to calculate the new bill.

The categories are:

  • small, for properties with a rateable value of less than £20,000

  • medium, for properties with a rateable value between £20,001 and £100,000

  • large, for properties with a rateable value above £100,001
     

Increasing bills

The appropriate fraction for increasing bills expresses the capped increase plus inflation.

The appropriate fractions are:

  • 1.16804 for small businesses

  • 1.27000 for medium businesses

  • 1.1785 for large businesses


Decreasing bills

The appropriate fraction for decreasing bills expresses the capped decrease less inflation.

The appropriate fractions are:

  • 0.457200 for small businesses
  • 0.762000 for medium businesses
  • 0.957072 for large businesses

 

Additional factors

As all of these calculations use the Small Business Rate multiplier, we have to adjust the calculation for businesses with rateable values greater than £50,000.

£50,000 is the point at which we need to use the Standard Business Rate multiplier.

The amount payable is increased by the small Business Rate correction factor of 0.013. We calculate this increase by multiplying the rateable value by the small Business Rate correction factor.

This adjustment will have the effect of making increases slightly larger and reductions slightly smaller. 

 

Legislation

The relevant legislation for this is the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2016.

 

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    Last updated: 27 February 2020

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