The Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025 / Rheoliadau Ardrethu Annomestig (Symiau a Godir) (Cymru) 2025

Explanatory note

Reproduced verbatim from the instrument as published on legislation.gov.uk (Crown Copyright, Open Government Licence v3.0). The note is prepared by the responsible government department and is not part of the instrument itself.

These Regulations come into force on 31 December 2025 and apply in relation to Wales.

These Regulations prescribe the rules to be used to find the chargeable amount for cases which fall within the descriptions prescribed in these Regulations.

The prescribed rules apply to a chargeable day falling within the period of three years beginning with 1 April 2026 and ending with 31 March 2029 (“ the relevant period ”). A chargeable day is defined in regulation 2.

The prescribed rules apply to defined hereditaments. Regulation 3 provides that a defined hereditament is a hereditament shown in a local list or in the central list on 31 March 2026, the relevant day and every day between. Where a hereditament is removed from a local list or the central list, subject to any appeal regarding removal from such a list, the prescribed rules do not apply to the hereditament from the day on which the removal took effect. Such a removal would not impact the application of the prescribed rules to the hereditament prior to the day on which the removal took effect.

The prescribed rules reduce the increase in a ratepayer’s liability as a result of the 2026 revaluation. Regulation 4 provides the calculation for the chargeable amount for the hereditament on 31 March 2026 (the base liability, “BL”). This is the day before the new lists compiled on 1 April 2026 have effect. The calculation is made in accordance with section 43 of the Local Government Finance Act 1988 (“ the Act ”) for occupied hereditaments in a local list, or section 54 of the Act for hereditaments in the central list, as appropriate. There is no calculation for BL where a hereditament is unoccupied on 31 March 2026 as the prescribed rules only apply where a person occupies the hereditament on that date (see regulation 6).

Regulation 5 provides the calculation for finding the notional chargeable amount (“ NCA ”). This is the chargeable amount that would apply for the defined hereditament on 1 April 2026, if the prescribed rules did not apply. The NCA is calculated in accordance with section 43, section 45 (for unoccupied hereditaments in a local list), or section 54 of the Act, as appropriate.

Regulation 5(1) is modified by paragraph (2) of that regulation in the event that there is a reduction to the chargeable amount for a hereditament (calculated in accordance with section 43, 45 or 54 of the Act) which takes effect during the relevant period but from a day after 1 April 2026. It operates so that the NCA, used for the purposes of regulation 6(a) and the formulae in regulations 10 and 11, is calculated using the new chargeable amount on the date the change took effect, rather than the chargeable amount on 1 April 2026. Provision is made for where that date falls within a year which contains 366 days.

Part 3 sets out the case to which the prescribed rules apply. The prescribed rules apply where a defined hereditament satisfies all of the conditions in regulation 6(a) to (d). Regulation 6(a) provides that for the prescribed rules to apply, the NCA must exceed the BL by more than £300. Regulation 6(b) and (c) requires that the person occupying the defined hereditament on 31 March 2026 is the same person who is the ratepayer on 1 April 2026. Where occupation or the liable ratepayer of the hereditament changes on 1 April 2026 or any later date during the relevant period, the prescribed rules do not apply. Regulation 6(d) addresses the situation where a part of a hereditament is unoccupied and the billing authority has required the valuation officer to apportion the rateable value of the hereditament between the occupied and unoccupied parts of the hereditament under section 44A(1) of the Act. The prescribed rules do not apply where such an apportionment applies to a defined hereditament or has effect in relation to the chargeable amount.

Where a defined hereditament is a case which meets all the requirements of the prescribed description in regulation 6, the rules prescribed in regulations 8 to 12 apply. These rules are to be used to find the chargeable amount for a chargeable day.

The first step under regulation 8 is to calculate the chargeable amount for the hereditament under section 43, 45 or 54 of the Act, as appropriate. The second step is to reduce that amount by the amounts calculated under whichever of regulations 10 to 12 applies.

Regulations 10 and 11 provide a phased reduction in chargeable amounts during the period beginning with 1 April 2026 and ending with 31 March 2028. In the first year, the chargeable amount is reduced by an amount equal to 67% of the increase in liability between 31 March 2026 and 1 April 2026. In the second year, the chargeable amount is reduced by 34% of the increase in liability between 31 March 2026 and 1 April 2026. The reduction in chargeable amount is calculated for each relevant day, with the figure 366 used in regulation 11 to reflect that 2028 is a leap year. Regulation 12 provides that during the period beginning with 1 April 2028 and ending with 31 March 2029 the chargeable amount is that found under section 43, 45 or 54 of the Act, as appropriate (i.e. there is no reduction for that financial year).

Regulation 9 ensures that the prescribed rules do not reduce the chargeable amount to below zero.

Regulation 13 revokes the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2022.

The Welsh Ministers’ Code of Practice on the carrying out of Regulatory Impact Assessments was considered in relation to these Regulations. As a result, a regulatory impact assessment has been prepared as to the likely costs and benefits of complying with these Regulations. A copy can be obtained from the Non-Domestic Rates Policy and Reform Division, Welsh Government, Cathays Park, Cardiff, CF10 3NQ.