Transitional arrangements

The transitional arrangements scheme is a way of helping ratepayers who see a significant rise in the rateable value (RV) of their property after a national revaluation. The scheme phases in both increases and decreases by limiting the amount the Business Rates for a property can go up or down each year for up to 5 years after the revaluation.

The phasing in of decreases for properties that have gone down in value helps pay for the phasing in of increases for properties that have risen in value. For a small company facing a big increase or decrease, it could take the full 5 years for the change to be phased in. A large company with a small increase or decrease might reach the new amount by year two.

Transitional arrangements are set by central government.

It's important to understand that the arrangements don't take account of reliefs. The amount you pay could still increase significantly in a revaluation year, if the rateable value of the property has increased to a level that means you can no longer claim a relief you were getting before.

The transitional scheme compares the charges based on the rateable value of your property at 31st March in the old rating list to the charges based on the rateable value at 1st April in the new rating list.  Changes to the rateable value in the old rating list at 31st March will result in the transitional calculation being amended.  You can't get transitional relief for any part of the bill that relates to any increase in rateable value resulting from changes to the property after that time.  

The Valuation Officer in some circumstances will issue transitional certificates for the calculation of transition.

If a transitional arrangement applies to your property, your Business Rates bill will include it.

Explaining the 2017/18 transition calculation

You'll see the transitional arrangements calculation on your bill.

Figures used in the calculation

The calculation uses the following figures:

The Notional Chargeable Amount (NCA)

The NCA is the property's new rateable value multiplied by the small business multiplier for 2017/2018 (46.6p)

The Base Liability (BL)

The BL is the property's previous rateable value multiplied by the small business multiplier for 2016/2017 (48.4p)

The maximum percentage change allowed under the scheme (X)

The maximum percentage change allowed in each year depends on whether the property counts as small, medium or large. The table below for the value of X shows the different limits.

Value of X - limit on increases (if you'll be paying more)
Value of X
1 April - 31 MarchSmall: Rateable value up to £20,000Medium: Rateable value £20,001 - £100,000 Large: Rateable value £100,001 and over
2017 - 2018  105%  112.5%  142%
2018 - 2019  107.5%  117.5%  132%
2019 - 2020  110%  120%  149%
2020 - 2021  115%  125%  116%
2021 - 2022  115%  125%  106%
Value of X - limit on decreases (if you'll be paying less)
Value of X (limit on decreases)
1 April - 31 March Small: Rateable value up to £20,000 Medium: Rateable value £20,001 - £100,000  Large: Rateable value £100,001 and over 
2017 - 2018  80%  90%  95.9%
2018 - 2019  70%  85%  95.4%
2019 - 2020  65%  80%  94.1%
2020 - 2021  45%  75%  94.2%
2021 - 2022  45%  75%  95.2%

The figure is converted into a decimal for the transitional calculation - so a limit of 105% would be a decimal of 1.05, showing a maximum allowed increase of 5%. A limit of 85% would be a decimal of 0.85, showing a maximum decrease of 15%.

An inflation-linked figure (Q)

Q is an inflation-linked figure set by central government. For 2017, it is1.02.

The Appropriate Fraction (AF)

The Appropriate Fraction is Q times X.

A supplement for properties with a rateable value of £51,000 or more (U)

There is a supplement for properties with a rateable value of £51,000 or more. This is because the transitional arrangement calculations are made using the small business multiplier rather than the higher standard multiplier that applies to these properties for the main Business Rates calculation. The supplement is the rateable value multiplied by the difference between the two multipliers. For 2017/18, this difference is 0.013.

The chargeable amount

The calculation for the chargeable amount is:

(BL x AF) + U

The transition figure is then the difference between this actual chargeable amount and the Notional Chargeable Amount.

If you have any questions about the scheme, please contact the Business Rates team.

Contact us

Contact Business Rates online

Business Rates Team available for telephone enquiries:
Monday - Friday, 9:00 - 17:00

0300 123 5013

Revenues Service 
Cheshire East Council
PO Box 622
Crewe
Cheshire
CW1 9JH

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