What is the transition scheme?

Rateable values can change fairly significantly between revaluations. This does not necessarily mean there will be a significant change in your rates bill as the multiplier is adjusted downwards after a revaluation to offset the overall rise in values.

However, some ratepayers may see dramatic changes in their rates bill. If this happens, you may be entitled to transitional relief which will soften the impact of revaluation. It phases in changes to your rate bill over a period of time. Different transitional relief will apply, depending on whether your bill has increased or decreased and whether your business is classed as small medium or large. A small business is defined as a property with a rateable value of less than or equal to £20,000, a medium property is defined as a property with a rateable value of more than £20,000 and less than £100,000, a large property is defined as a property with a rateable value of more than £100,000.

Transitional relief is based on the change in your rates bill from one financial year to your new rates bill in the next financial year. It does not depend on a change in your rateable value itself.  The transition scheme operates over a five year period in tune with revaluations on non-domestic properties. 

Most ratepayers will pay their true rate liability within a shorter period than the five year phasing term.

Table one shows the proposed limits by which a rates bill can be increased in a single year before transitional reliefs apply:

Transitional relief is automatically calculated and will be included in your bill from 2023/2024 forward. We have to undertake a specific transitional calculation and the two examples below help illustrate the way transitional arrangements work in practice.

For more information, contact our business rates team on 01329 824651 or by e-mail at businessrates@fareham.gov.uk.