Written - NDR Revaluation – Enhancement of Rate Relief Thresholds

The non domestic property re-valuation takes place every five years in England and Wales. Revaluation is not a tax raising measure - it simply redistributes the rates payable between properties based on their relative values at the time of the revaluation. Consequently, some rates bills will rise and some will fall, but the average national bill will only change roughly with in line with any increase or decrease in the September 2009 retail price index.  

Over 60% of ratepayers will benefit from the revaluation and will see a reduction in their bills because we have provisionally reduced the multiplier for 2010-2011 from 0.489 to 0.409. 

I therefore propose to amend The Non-Domestic Rating (Small Business Relief) (Wales) Order 2008 so that the main relief thresholds will be increased by at least 20% so that that funding for small business rates relief is at least maintained at current levels.  At least half of all business premises in Wales could potentially qualify for this relief, and many others will qualify for other reliefs such as those occupied by charities or unoccupied properties. 

Consequently, most businesses whose rateable values have increased in line with the national average, and many whose values have increased by more than this will not fall out of the relief thresholds. The rateable value thresholds for relief will be increased as follows 

• £2,000  to £2,400  for the general 50% relief
• £6,500 to £7,800 for the general 25%  relief
• £9,000 to £11,000 for the 25% retail relief.  

In deciding on this course of action I have considered representations from business representatives, including the Federation of Small Businesses and the Wales Tourism Alliance.  They have indicated that their main priority is the uprating of the small business rates relief thresholds, and that there is little enthusiasm for a transitional relief scheme based on the English model which would effectively take money away from those businesses who are suffering the worst during the recession to cap increases for businesses that have been more successful.    

The Assembly Government gave careful consideration to additional forms of assistance, including targeted measures to help small and medium sized businesses whose rateable values have increased by significantly more than the average, but due to the current difficult financial situation was unable to provide any additional funding for a viable scheme within the budget that was passed by the Assembly on 8 December 2009.

I am aware that in certain local hotspots clusters of valuations have increased by significantly more than average, but this reflects local rental values, which form the basis of non domestic rating valuations. I am also aware that some sectors of the tourism sector have had above average increases, particularly the self catering sector, However, this sector will benefit greatly from the raising of the relief thresholds, with more over 95% of these properties falling within the revised rates thresholds, and more than half of these properties potentially qualifying for 50% relief, and therefore paying less than £41 per month.  Over 90% of guest and boarding houses will also fall within the revised thresholds.

The Non-Domestic Rating (Unoccupied Property) (Wales) Regulations 2008 will also be amended  to raise the  rateable value threshold at which empty properties are excluded from liability for non-domestic rates from to £18,000 from 1 April  2010 – 31 March 2011. This will apply to Wales the temporary increase to the threshold announced by the Chancellor in respect of England in the pre – budget report on 9 December 2009, and will be funded by the UK Government.

This statement has been issued  during the recess as businesses seek clarity as to their non domestic rates liabilities for next year at the earliest opportunity, and a decision on the measures could not be taken until the completion of discussions on the budget.