Wales introduces business rates reform bill

The Welsh government has introduced the a bill in the Senedd this week, delivering most of the proposals for business rates reform set out last year in its consultation on the topic.

The Local Government Finance (Wales) Bill, tabled on 20 November, proposes more frequent revaluations and measures required to deliver them, as well as wider improvements to enable the Welsh government to better adapt the business rates system to meet the needs of Wales.

In relation to the business rates, the bill will:

• increase the frequency of revaluations to three-yearly;
• enable the revaluation cycle to be altered using regulations;
• change the way ratepayers provide information to the Valuation Office Agency (VOA), to ensure more frequent revaluations are sustainable in the long-term;
• enable the Welsh government to confer, vary or withdraw reliefs and exemptions, and to prescribe differential multipliers, using regulations;
• strengthen the eligibility conditions for charitable relief for unoccupied properties;
• remove a timing restriction on the awarding of discretionary relief by local authorities;
• expand the definition of a new building for the purpose of the serving of completion notices by local authorities; and
• enable the counteraction of advantages arising from artificial avoidance arrangements specified in regulations.

The details of business rates arrangements for next year, including the level of the multiplier, will be confirmed alongside the draft budget announcement in December.

Meanwhile, the Non-Domestic Rating Act 2023 has received Royal Assent on 26 October, which has been used to bring about certain reforms for Wales at the earliest possible opportunity. The provisions extended to Wales include powers to establish new relief schemes, which were the subject of recent consultations.

Earlier in September, the Welsh government has announced that a new improvement relief will be provided from 1 April 2024 onwards. The relief will support ratepayers investing in improvements which increase the ratable value of the properties they occupy. It will operate consistently with the same relief in England.

The government said the VOA is working with local authorities to finalise the process for providing certificates for qualifying improvement works.

The government has also recently announced new measures to support the use of renewable energy and the decarbonisation of heat in non-domestic properties which will be in place from 1 April 2024.

These measures are a relief for low-carbon heat networks and an exception from rating assessments for the properties they are part of, for plant and machinery used in onsite renewable energy and electric vehicle charging points.