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Revaluation 2017 and Transitional Arrangements

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All rateable values are reassessed at a general revaluation. The 2017 revaluation took effect from 1st April 2017. Revaluations make sure each ratepayer pays their fair contribution and no more, by ensuring that the share of the national rates bill paid by any one ratepayer reflects changes over time in the value of their property relative to others. Revaluation does not raise extra money for Government. Whilst the 2017 revaluation will not increase the amount of rates collected nationally, within this overall picture, over 7 out of 10 ratepayers will receive a reduction or no change in their bill and some ratepayers will see increases.

For those that would otherwise see significant increases in their rates liability, the Government has put in place a £3.6 billion transitional relief scheme to limit and phase in changes in rate bills as a result of the 2017 revaluation.

Transitional Relief Scheme for 2017/18

The Valuation Office Agency revalued properties for 2017. As a result, the amount of Business Rates you need to pay could change. To limit the effect of the changes, the government has introduced a transitional relief scheme. The transitional relief scheme means that both reductions and increases to bills will be brought in gradually, over as many as five years. By limiting the reductions to bills in the short term, the government can help people who are facing increases in their bills. The transition scheme only applies to the bill for properties present in the rating list on 1 April 2017.

We apply the transition relief automatically. You do not need to apply, and the relief will show on your bill.

For 2017/18, Business Rate increases are limited to:

  • 5% plus inflation for small businesses      
  • 12.5% plus inflation for medium businesses
  • 42% plus inflation for large businesses

For 2017/18, Business Rate decreases are limited to:

  • 20% less inflation for small businesses
  • 10% less inflation for medium businesses
  • 4.1% less inflation for large businesses

Calculating bills

To calculate Business Rates bills, we multiply the base liability by the appropriate fraction. This depends on the appropriate fraction category, and whether the bill is increasing or decreasing.

Working out the base liability

We work out the base liability by multiplying the rateable value as at 31 March 2017 by the Small Business Rate multiplier (0.484).

Appropriate fraction categories

There are three categories for businesses, which we use to decide which appropriate fraction we should be using to calculate the new bill. The categories are:

  • small, for properties with a rateable value of less than £20,000
  • medium, for properties with a rateable value between £20,001 and £100,000
  • large, for properties with a ratebale value above £100,001

Increasing bills

The appropriate fraction for increasing bills expresses the capped increase plus inflation.

The appropriate fractions are:

  • 1.071000 for small businesses
  • 1.1475000 for medium businesses
  • 1.4484000 for large businesses

Example of increase  - Rateable value on 31/3/17 is £15,000, increasing to £17,000 on 1/4/17

To calculate the bill for a small business with a rateable value on 1/4/17 of £17,000, we would multiply the rateable value by 0.466. 0.466 is the Small Business Rate multiplier. This gives a total bill of £7,922.00.

We would then consider the base liability. In this scenario the rateable value had increased from £15,000; the base liability is £7,260.00; the bill has obviously increased.

Therefore, we would multiply the base liability by the appropriate fraction of 1.071000. This gives the maximum total charge of £7,775.46.

Without the transitional relief, the small business in this example would need to pay £7,922.00. Because of the increase cap, the small business will pay the maximum total charge of £7.775.46, with a total relief of £146.54.

Decreasing bills

The appropriate fraction for decreasing bills expresses the capped decrease less inflation.

The appropriate fractions are:

  • 0.816000 for small businesses
  • 0.918000 for medium businesses
  • 0.978180 for large businesses

Example of reduction  - Rateable value on 31/3/17 is £17,000, reducing to £14,000 on 1/4/17.

To calculate the bill for a small business with a rateable value of £14,000, we would multiply the rateable value by 0.466. 0.466 is the Small Business Rate multiplier. This gives a total bill of £6,524.00.

We would then consider the base liability. In this scenario the rateable value had reduced from £17,000; the base liability is £8,228.00; the bill has obviously decreased.

Therefore, we would multiply the base liability by the appropriate fraction of 0.816000. This gives a minimum total charge of £6,714.04.

Without the transitional relief, the small business in this example would need to pay £6,524.00. Because of the decrease limit, the small business will pay the minimum total charge of £6,714.04.

Additional factors

As all of these calculations use the Small Business Rate multiplier, we have to adjust the calculation for businesses with rateable values of £51,000 or above.

£51,000 is the point at which we need to use the Standard Business Rate multiplier.

The amount payable is increased by the small Business Rate correction factor of 0.013. We calculate this increase by multiplying the rateable value by the small Business Rate correction factor.

This adjustment will have the effect of making increases slightly larger and reductions slightly smaller.

Legislation

The relevant legislation for this is the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2016.

Further information about transitional arrangements and other reliefs may be obtained from Ipswich Borough Council or gov.uk

More information on the 2017 revaluation can be found at gov.uk

You can click, find and review your rateable value on the VOA’s website. If you have reason to believe that your 2017 rateable value is not correct, follow the instructions provided on the site.  You will need to do the following (not available until 1 April 2017):

An appeal on your 2017 rateable value is not possible, and may not be necessary, until you have completed CHECK and CHALLENGE.

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Contact Details

Business Rates,
Ipswich Borough Council,
1W Grafton House,
15-17 Russell Road,
Ipswich,
IP1 2DE

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01473 433851