Wales limits business rates increases 2026–2029

From 1 April 2026, Wales will phase in higher non-domestic rates that result from the revaluation. If your bill goes up by more than £300, you won’t pay the full jump straight away: two years of staged relief apply before the full amount is due in 2028–29. We’ll show you how to check that using two figures you’ll see on worked examples below.

The legal basis is the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025. They take effect on 31 December 2025 and apply to bills from 1 April 2026 through 31 March 2029, following approval by Senedd Cymru.

What the scheme does is simple to state and useful to understand: it slows down big increases after the 2026 revaluation. In year one (2026–27) you get relief worth 67% of the increase above your 2025–26 position; in year two (2027–28) the relief is 34%; in year three (2028–29) there is no reduction and you pay the full updated charge. The relief applies only where the increase is more than £300.

To be eligible, the property must meet several conditions on status and continuity. It must appear on a local rating list or the central list on 31 March 2026, on the day the bill is due, and on every day in between. The person liable on 31 March 2026 must be the same ratepayer on the relevant day. The property needs to have been occupied on 31 March 2026. Transitional relief does not apply if an apportionment under section 44A (partly occupied properties) is in play.

Two ideas drive the calculation. First is your base liability (BL): the annualised bill you’d have paid based on the chargeable amount for 31 March 2026. Second is the notional chargeable amount (NCA): the annualised bill based on the chargeable amount for 1 April 2026. Relief is then a set percentage of the increase between these two. If your chargeable amount later drops during the scheme-for example, after an appeal or another relief-the NCA used for relief is recalculated from the date of the change. All of this is done on a daily basis, so the maths aligns with the number of days in the financial year.

Let’s practise with a clean example you can use in class. Suppose a café’s BL is £10,000 and its NCA on 1 April 2026 is £14,000. The increase is £4,000, which is above £300 so relief applies. In 2026–27 the bill is £14,000 minus 67% of £4,000, so £14,000 − £2,680 = £11,320. In 2027–28 the bill is £14,000 minus 34% of £4,000, so £14,000 − £1,360 = £12,640. In 2028–29 there is no reduction, so the bill is £14,000, subject to any other reliefs you separately qualify for.

Now try a twist that often crops up after revaluation. Imagine a small workshop with BL £18,500 and NCA £21,500, so the increase is £3,000. In 2026–27 the bill would start as £21,500 − 67% of £3,000 = £21,500 − £2,010 = £19,490. If, from 1 October 2026, a successful challenge reduces the chargeable amount so that the annualised figure would be £20,500, the rules recalculate the NCA from that change date. For the days from 1 October to 31 March, the increase becomes £20,500 − £18,500 = £2,000 and the daily relief is based on that smaller rise. This is why bills can change during the year even with the same percentage relief in place.

Here’s a boundary case that helps you check eligibility quickly. A bookshop with BL £12,200 receives an NCA of £12,470. The increase is £270, which does not exceed £300. Because the rise is at or below £300, no transitional relief applies and the bill for 2026–27 is simply the chargeable amount for that year.

Continuity of the ratepayer matters. If a new company takes over on 1 April 2026-even if nothing else about the building changes-transitional relief stops because the person liable on 31 March 2026 is not the same person liable on the day in question. This keeps the relief focused on helping existing occupiers adjust to new bills rather than supporting changes in occupation.

A quick note on which lists are covered. The scheme applies to properties on local rating lists and to those shown on the central list. The same BL and NCA approach applies, with the appropriate legal sections used for each list when calculating the chargeable amounts.

If you’re teaching this, a reliable classroom approach is to work in three steps. First, find BL from the 31 March 2026 position and NCA from 1 April 2026. Second, take the difference and check that it’s more than £300. Third, apply the percentage for the relevant year to that difference and subtract it from the year’s chargeable amount, remembering that the calculation is daily and adjusts if the chargeable amount falls during the scheme.

Why is Wales doing this? Ministers say the aim is to help ratepayers manage the move to updated valuations while wider reforms-like differential multipliers-take effect. The Welsh Government has set aside £116 million over two years to fund the transitional relief so bills can be reduced at source rather than through applications.

For completeness, note that the 2025 Regulations supersede the 2022 Wales scheme that applied after the 2023 revaluation. That earlier instrument used the same 67% then 34% pattern to slow increases, but it ended before the new revaluation takes effect. The new rules now carry that staged approach into the 2026–29 period.