Chelmsford City Council

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 2019/20, Business Rate increases are limited to:

  • 10% plus inflation for small businesses      
  • 20% plus inflation for medium businesses

  • 49% plus inflation for large businesses

For 2019/20, Business Rate decreases are limited to:

  • 35% less inflation for small businesses

  • 20% less inflation for medium businesses

  • 5.9% 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:

  • 1.12530 for small businesses

  • 1.22760 for medium businesses

  • 1.52420 for large businesses


Decreasing bills

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

The appropriate fractions are:

  • 0.46035 for small businesses
  • 0.76725 for medium businesses
  • 0.962643 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.

 

    Mandatory field

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