Wales caps business rates rises 2026 to 2029 explained

Business rates in Wales are changing again, but this time the rules aim to cushion the jump that often follows a revaluation. If you run a shop, studio, café or manage a school estate, we’ll walk you through what you’ll actually pay and how to check the maths yourself.

Welsh Ministers have signed the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025. They were made on 17 December 2025, come into force on 31 December 2025, and apply to bills for the period 1 April 2026 to 31 March 2029. The official text is published on legislation.gov.uk.

In plain English: the Regulations phase in increases caused by the 2026 revaluation. In 2026–27, qualifying properties get 67% of the increase taken off. In 2027–28, 34% of the increase is taken off. From 1 April 2028 to 31 March 2029 there is no reduction and the normal charge applies.

To qualify, four conditions must all be met on the day in question. The property must appear on the rating list on 31 March 2026 and remain on a list continuously up to the relevant day. The person liable on 31 March 2026 must be the same ratepayer on that later day, and the property had to be occupied on 31 March 2026. The jump between the old and new annualised charges must be more than £300, and no part‑occupied apportionment under section 44A should apply.

Let’s translate the key terms we’ll use. Base Liability (BL) is your 31 March 2026 daily charge multiplied up to a full year; think of it as your ‘old’ annual bill. Notional Chargeable Amount (NCA) is the annual amount you would pay from 1 April 2026 under the normal rules, before any phasing is applied. A defined hereditament is simply the property that stays on the rating list without gaps from 31 March 2026 to the day we’re calculating. A local list is the council list; the central list is used for large network properties such as utilities.

Finding BL is a lookup job. Take the chargeable amount for 31 March 2026 calculated under section 43 (local list, occupied) or section 54 (central list) of the 1988 Act and multiply by 365. If the property was unoccupied on 31 March 2026, there is no BL for these rules and this phasing relief will not apply.

Finding NCA is similar. Start with the 1 April 2026 charge under sections 43, 45 or 54 and multiply by 365. If, later in the period, something reduces your normal charge-for example, a successful challenge or a relief change-the law resets the NCA to that reduction date, and uses the number of days in that financial year. Note that 2028 has 366 days.

Quick example to orient you. Suppose your annualised BL is £10,000 and your annualised NCA is £16,000. The increase is £6,000, which is above the £300 threshold, and you were the occupier on 31 March 2026. In 2026–27, the reduction is 67% of £6,000 (£4,020). Your payable amount is the normal 2026–27 charge minus £4,020; if nothing else changes, that is about £11,980 for the year.

In 2027–28, the reduction is 34% of the same £6,000 increase (£2,040). Again assuming nothing else changes, you would pay about £13,960 for that year. From 1 April 2028, the full normal charge applies with no reduction under these Regulations.

Small change example. If BL is £10,000 and NCA is £10,250, the increase is £250. Because the gap is £300 or less, the phasing rules don’t apply and you pay the normal bill from day one. This is deliberate: the scheme only dampens larger jumps.

If the liable ratepayer changes on or after 1 April 2026, the phasing stops for that property because the rule requires the same person as on 31 March 2026. What this means for you: if you are taking on a new unit after March 2026, don’t assume the outgoing tenant’s transitional reduction carries over to you.

Where a billing authority has split a property for part‑occupation under section 44A, these phasing rules do not apply while the apportionment is in force. In practice you rely on the part‑occupied relief rather than the transition scheme-these two do not stack together.

The property must stay on the rating list throughout. If it is removed-for example, because it is demolished or re‑assessed-phasing ends from the removal date. Days before removal are unaffected; you don’t lose any reduction already applied.

The central list can also benefit where the conditions are met. For most of us, think of large utility networks listed nationally rather than by one council; the same phasing logic runs if there’s a qualifying increase and all tests are satisfied.

For those who like the arithmetic: the law works day by day. First, you calculate the day’s normal charge under sections 43, 45 or 54. Then you subtract the daily slice of the reduction set for that financial year-based on the annual increase and spread across 365 days (or 366 in 2028). If subtracting would take you below zero, the day’s charge is set to zero.

The Regulations revoke the 2022 scheme and are signed by Mark Drakeford, Cabinet Secretary for Finance and Welsh Language. A Regulatory Impact Assessment has been prepared by the Welsh Government. We’ve used the legislation.gov.uk text for all dates and definitions so you can double‑check your own bill with confidence.