The Welsh Government has set the method for phasing in higher non-domestic rates bills following the 1 April 2026 revaluation. The Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025 apply from 1 April 2026 to 31 March 2029 and provide relief for increases above £300, with £116m allocated to fund the scheme. The instrument was listed by legislation.gov.uk in late December and is supported by published government guidance.
In practical terms, this is a transitional relief scheme for Wales. Where a property’s liability rises by more than £300 after revaluation, part of the increase is removed for two financial years before full liability resumes in 2028–29. The scheme covers properties on both the local rating lists and the Welsh central list.
Eligibility is tightly defined. The property must appear on the local or central list on 31 March 2026, on every day thereafter up to the billing date, and on the billing date itself. The same ratepayer must have occupied the property on 31 March 2026 and remain the liable ratepayer on the relevant day. Where a billing authority has required an apportionment for partial occupation under section 44A of the Local Government Finance Act 1988, the transitional rules do not apply.
Two benchmark figures underpin the calculation. The base liability is the annualised charge based on the bill for 31 March 2026. The notional chargeable amount is the annualised charge that would apply on 1 April 2026 if no transitional rules were in place; for empty properties after 1 April 2026, the notional figure is calculated using section 45 rules. Transitional relief only applies where the notional amount exceeds the base liability by more than £300.
If, after 1 April 2026, a successful proposal or appeal or other change reduces the chargeable amount, the notional chargeable amount is recalculated from the effective date of that change. Liability and relief are set on a daily basis; the 2027–28 calculation uses 366 in the denominator to reflect the leap day in February 2028. Any negative result after applying the deduction is set to zero.
The phased deduction is fixed by year. In 2026–27, bills are reduced by 67% of the increase between the notional amount and the base liability. In 2027–28, the deduction is 34% of that same increase. From 1 April 2028 there is no deduction under these regulations and bills reflect the full post‑revaluation liability, subject to any other reliefs.
Administration is automatic. For properties on local lists, billing authorities must adjust bills that meet the criteria and identify the total relief provided in NDR1 and NDR3 returns. For central‑list properties, the Welsh Government applies the deduction directly. Ratepayers do not need to apply, but should check bills when issued.
Transitional relief is applied after statutory reliefs included in the core calculation of liability and before any discretionary reliefs awarded by local authorities. Where discretionary ‘top‑up’ charitable relief is granted, it is applied after the transitional deduction. This ordering avoids double‑counting and matches the statutory sequence.
The legal basis is section 58 of the Local Government Finance Act 1988, which allows Welsh Ministers to replace the usual calculation with prescribed rules for a defined period, and section 143A (inserted by the Local Government Finance (Wales) Act 2024) which sets the Welsh Ministers’ procedure for making secondary legislation. The 2025 Regulations operate within these powers.
The scheme sits alongside wider changes confirmed for 2026–27. Ministers have announced differential multipliers: a standard multiplier of 0.502, a lower retail multiplier of 0.350 for eligible small and medium shops, and a higher multiplier of 0.515 for the largest properties by value. These structural changes interact with revaluation outcomes and the transitional rules.
For councils and finance teams, billing systems should be configured to calculate daily liabilities, apply the fixed percentage deduction to the increase, and switch from 365 to 366 in 2027–28. Occupier‑continuity checks on and after 31 March 2026 are essential, as a change in ratepayer ends entitlement to the deduction for subsequent days.
Businesses should review draft 2026–27 estimates using the announced multipliers and confirm whether any increase above £300 will be tapered. Those that become empty after 1 April 2026 may still receive the deduction once any empty property relief period ends. Queries over bill calculations should be raised with the administering local authority.