Wales sets 2026-29 business rates transitional relief

From 1 April 2026, if your business rates bill in Wales jumps by more than £300 because of revaluation, that rise won’t hit all at once. It will be phased over two years under new regulations that come into force on 31 December 2025. We’ve read the rules so you don’t have to, and we’ll walk through the maths with clear examples you can check against your bill.

What changes for you is simple: Wales will discount most of the increase at first, then taper that support. In 2026–27 you pay only 33% of the increase; in 2027–28 you pay 66% of the increase; by 2028–29 you’re on your full bill. The Welsh Government is fully funding this scheme.

Who qualifies? Your property must have been on a local or central rating list on 31 March 2026, you must have occupied it that day, and you must still be the ratepayer when the bill is due. The increase has to be more than £300. If your property is subject to a section 44A ‘partly occupied’ apportionment, this specific relief does not apply. Central list properties are included.

Let’s decode the two key ideas you’ll see on guidance and bills. Base liability (BL) is your 31 March 2026 chargeable amount, annualised. Notional chargeable amount (NCA) is what your 1 April 2026 bill would be if there were no transitional rules. The relief compares NCA with BL and then applies a daily deduction across the year.

There are a few guardrails. The deduction is calculated daily, using 365 in 2026–27 and 366 in 2027–28 because that year overlaps a leap year. If a deduction would push your bill below zero, your chargeable amount is set to £0 for that day. And if your chargeable amount falls later (for example after a successful valuation change), the NCA used for the calculation is reset from the effective date of that change.

How it’s applied. For local list properties, councils will update bills automatically where the criteria are met. For central list ratepayers, the Welsh Government will adjust bills. If something looks off, you can ask your council to check the calculation.

Bigger picture for 2026. The revaluation takes effect from 1 April 2026 and, alongside transitional relief, Wales is changing the multipliers: a standard multiplier of 0.502, a new lower retail multiplier set at 0.350 for small to medium shops, and a higher multiplier at 0.515 for the largest properties by value. Ministers have also set aside £116m over two years to fund the transition.

Worked example 1 (small shop). Suppose your 2025–26 bill (BL) was £3,000 and your 2026–27 notional bill (NCA) is £4,200 after any other reliefs. The increase is £1,200, so you qualify. In 2026–27 your deduction is 67% of £1,200 = £804. Your payable bill becomes £4,200 − £804 = £3,396. In 2027–28 your pre‑calculated deduction is 34% of £1,200 = £408. Your bill for 2027–28 is whatever the chargeable amount is for that year, minus £408. By 2028–29 the deduction is £0 and you pay the full chargeable amount.

Worked example 2 (larger office). Imagine BL is £50,000 and NCA is £65,000. The increase is £15,000. Year one deduction: 67% of £15,000 = £10,050, so you pay the 2026–27 chargeable amount minus £10,050. Year two deduction: 34% of £15,000 = £5,100, so you pay the 2027–28 chargeable amount minus £5,100. Year three: no deduction from this scheme.

If your property becomes empty after 1 April 2026, transitional relief can still apply after any initial empty‑property relief ends. The relief is calculated daily, so it pauses during a three‑month empty period (six months for industrial) when your bill may already be nil, then resumes if you remain the same ratepayer.

If your valuation goes down during the scheme, your entitlement is recalculated from the effective date. If inflation moves the multiplier in 2027–28, that does not trigger a fresh entitlement calculation: the deduction you earned based on 1 April 2026 stays fixed for that second year.

Where this sits in law. The scheme is set out in the Non‑Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025, made in December and applying from 1 April 2026. This instrument is listed as SI 2025/1371 on legislation.gov.uk.

What this means for planning. Keep your 31 March 2026 bill safe and note who the ratepayer was that day. Compare it with your 1 April 2026 position once your new bill arrives. If the increase is over £300 and you meet the conditions, expect the deduction to appear automatically. If it doesn’t, contact your council’s business rates team with both bills to hand.

Glossary for your lesson notes. Hereditament: the property or unit you pay rates on. Local list: the council‑held list of properties. Central list: national list for certain network‑type properties. BL: your 31 March 2026 amount annualised. NCA: your 1 April 2026 amount annualised. Multiplier: pence in the pound used to turn rateable value into a bill. For questions about how your rateable value was set, the Valuation Office Agency handles that.