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 2026 scheme phases in increases by limiting the amount the Business Rates can go up each year for up to 3 years after the revaluation.

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 31 March in the old rating list to the charges based on the rateable value at 1 April in the new rating list.

Changes to the rateable value in the old rating list at 31 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 transition calculation

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

2026 rating list

A new transitional relief scheme has been announced by the Government for the 2026 revaluation. The scheme will support ratepayers who have seen an increase to their bill following the revaluation. No transition will be added to ratepayers who have had a decrease in their rateable value. 

If your property qualifies for transitional relief it will automatically be shown on your rates 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 relevant multiplier as at 1 April 2026.

The Base Liability (BL)

The BL is the property's previous rateable value multiplied by the relevant multiplier as at 31 March 2026. In subsequent years the base liability is the chargeable amount shown in the transitional calculation on your demand for the previous year.

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)

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%.

An inflation-linked figure (Q)

Q is an inflation-linked figure set by central government.

For 2026 to 2027 this figure is 1

The Appropriate Fraction (AF)

The Appropriate Fraction is Q times X

The chargeable amount

The calculation for the chargeable amount is:

(BL x AF)

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

Transitional Relief Supplement

For the 2026-27 financial year, starting 1 April 2026, the UK government is introducing a 1p Transitional Relief Supplement (TRS) to help fund the Transitional Relief scheme.

This is calculated on the  RV  of your property as at 1 April 2026 and will be shown on all Non-Domestic Rate demands.  If your bill receives transitional relief this amount will be offset by the transitional relief you receive.

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

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