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Transitional business rates

In this section

  1. Transitional business rates
  2. How transitional business rates are calculated

How transitional business rates are calculated

The transitional arrangements calculation will be on your business rates bill and use the following figures:

  • Notional chargeable amount (NCA): the property's new rateable value multiplied by the small business multiplier for 2017/2018 (46.6p)
  • Base liability (BL): the property's previous rateable value
  • Maximum percentage change allowed under the scheme (X): depends on whether the property councils as small, medium or large. The table below for the value of X shows the different limits.
Value of X - limit of increases (if you will be paying more)
April 1 to March 31 Small:rateable value up to £20,000 Medium: rateable value of £20,0001 to £100,000 Large: rateable value of £100,001 and higher
2017 to 2018 105 per cent 112.5 per cent 142 per cent
2018 to 2019  107.5 per cent 117.5 per cent 132 per cent
2019 to 2020 110 per cent 120 per cent 149 per cent
2020 to 2021 115 per cent 125 per cent 116 per cent
2021 to 2022 115 per cent 125 per cent 106 per cent
Value of X - limit on decreases (if you'll be paying less)
April 1 to March 31 Small: rateable value up to £20,000 Medium: rateable value £20,001 to £100,000 Large: rateable value £100,001 and higher
2017 to 2018 80 per cent 90 per cent 95.9 per cent
2018 to 2019 70 per cent 85 per cent 95.4 per cent
2019 to 2020 65 per cent 80 per cent 94.1 per cent
2020 to 2021 45 per cent 75 per cent 94.2 per cent
2021 to 2022 45 per cent 75 per cent 95.2 per cent

 

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

  • inflation-linked figure (Q): set by central Government. For 2017, it is 1.02
  • appropriate fraction (AF): Q multiplied by X
  • supplement for properties with a rateable value of £51,000 or more (U): 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 0.0013
  • chargeable amount: calulated using (BL x AF) + U

The transition figure is the difference between this actual chargeable amount and the notional chargeable amount.