Wales confirms 2026-29 business rates transition rules

If you run a shop, café or studio in Wales, your business rates could change from April 2026. The Welsh Government has approved rules to pace any sharp increases over three years so bills do not spike overnight. Senedd Cymru backed the Non‑Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025 on 17 December 2025, and they came into force on 31 December 2025.

Think of this as a safety rail for the 2026 revaluation. Values are being refreshed and, without a buffer, some bills would jump in one go. These Regulations apply to chargeable days from 1 April 2026 to 31 March 2029 across Wales and are designed to smooth the step‑up so you can plan cash flow with fewer surprises.

Here is the shape of the scheme. If your bill is due to rise, the increase is eased in. In 2026–27, 67% of the rise is removed. In 2027–28, 34% of that original rise is removed. In 2028–29, there is no reduction, so you reach the full amount. It is a glide path rather than a cliff edge.

Let’s decode the two labels you will see. Your base liability (BL) is effectively your 2025–26 position: the chargeable amount for 31 March 2026, annualised. Your notional chargeable amount (NCA) is what your bill would be on 1 April 2026 with no transitional help, also annualised. The relief looks at the difference between the NCA and the BL.

To be covered, that difference must be more than £300. There is also a continuity rule: the same ratepayer must have occupied the property on 31 March 2026 and be liable on the day you are being billed. If the property was empty on 31 March 2026, or your bill is split between occupied and unoccupied parts under section 44A of the 1988 Act, the scheme does not apply.

A quick note on lists. Most premises you recognise-shops, offices, cafés-sit on a local list kept by your council. Some large networks such as utilities are on a central list maintained nationally. The transition rules can apply to both, as long as the property appears on the list on 31 March 2026, on the day you are being billed, and on each day in between.

Worked example one. Imagine your 2025–26 annual bill was £10,950. After revaluation, your bill on 1 April 2026 with no help (the NCA) would be £14,000. The increase over the baseline is £3,050. Because this is over £300, the transition applies.

In 2026–27, you remove 67% of the £3,050 increase, which is £2,043.50. Your payable amount becomes £14,000 minus £2,043.50, giving £11,956.50 for the year. Bills are calculated per day, so if your liability changes mid‑year, the figure is prorated from the relevant date.

In 2027–28, you remove 34% of that original £3,050 increase, which is £1,037. From April 2027, the bill is £14,000 minus £1,037, so £12,963 for the year, again calculated day by day. In 2028–29 there is no reduction, so you pay the full £14,000.

If your liability drops after 1 April 2026-say a change reduces your rateable value-the NCA used in the calculation switches to that new, lower amount from the date the change takes effect. The step‑downs then apply to the updated gap. This prevents you being stuck with an out‑of‑date starting figure.

The legal calculation is daily. That matters because 2028 is a leap year, so the formula uses 366 days when prorating that year. You do not need to re‑run the maths yourself, but it explains why monthly instalments can differ slightly between years.

If the property is removed from the list altogether-perhaps after demolition-the transitional rules stop from the removal date. Any relief already applied for earlier days is unaffected. If a different ratepayer takes over at any point, the transition stops because the continuity condition is broken.

If your increase is £300 or less, the scheme does not engage. For example, if the BL is £10,000 and your new amount without relief would be £10,250, the bill becomes £10,250 in 2026–27, subject to any separate reliefs you receive outside this transition.

Here is what to check on your bill. Look for the BL and the NCA used, confirm the ratepayer name is the same as at 31 March 2026, and check that the transitional reduction matches 67% of the original increase in the first year and 34% in the second. If something looks off, ask your billing authority to walk you through the numbers with reference to the Regulations.

Formally, the Non‑Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025 were made by the Welsh Ministers on 17 December 2025 and signed by the Cabinet Secretary for Finance and Welsh Language, Mark Drakeford. They revoke the 2022 scheme and apply only in Wales for the period 1 April 2026 to 31 March 2029. The explanatory note on legislation.gov.uk confirms these points.

One final fairness check built into the law is about totals. Ministers must have regard to ensuring that, so far as practicable, the overall amount payable across Wales in each year does not exceed what would likely be payable without these Regulations. In plain terms, this is about smoothing bills rather than raising the overall take.

Remember that transitional help sits alongside other reliefs. The law’s order is to calculate the chargeable amount under the Local Government Finance Act 1988 and then subtract the transitional reduction for the relevant year, never below zero. Your bill should reflect that sequence so the smoothing and any other reliefs stack correctly.