Outcome of Reforming Non-Domestic Rates in Wales consultation

The Welsh government has published its response to the consultation ‘Reforming Non-Domestic Rates in Wales’. It now intends to move forward with the development of the proposals.

In March 2022, the Welsh government's plans to reform Non-Domestic Rates (NDR) were set out. This was followed by a 12-week Consultation beginning in September 2022 which sought views on the proposed reforms.

The consultation received 73 responses. These were generally supportive.

• 75% were in favour of the proposal for revaluations to occur every three years in future.
  • There was a general view that this change would ensure the NDR system becomes more responsive to economic changes, whilst maintaining a degree of certainty.
  • 60% were against revaluations occurring more frequently than every three years.
• 65% were in favour of a gap shorter than two years between the antecedent valuation date and the revaluation taking effect.
• There was a balance between views on proposals for a proportionate compliance regime.
  • Some respondents supported penalties, others recognised the need for a penalty system with some considering the proposed penalties to be too high.
• Proposals to undertake a review of relief schemes were supported by 46% of responses.
  • Concern about the complexity of the current system was highlighted.
• Increased legislative flexibility around reliefs was supported by 64%, although a quarter called for complete alignment of relief schemes with other UK countries.
• 71% were in favour of expanding the powers of local authorities to award discretionary relief retrospectively, viewing this as enabling greater flexibility to address localised issues.
• Half of the responses were supportive of the Welsh government having the ability to vary the multiplier for different parts of the tax base.
  • Views against greater flexibility highlighted the fairness of the current system and the additional complexity that more than one multiplier would introduce.
• 60% were against proposals to clarify the intended scope of appeals citing a material change of circumstances.
  • There were concerns that changes occurring between revaluations would not be captured in a timely manner.
• Some 87% supported the removal of the need for regulations to make central list changes.
• 33% opposed a local land value tax, 24% stated a desire to retain and improve NDR, 20% were in favour of a local land value tax, 15% proposed an alternative form of taxation and 8% were unsure of their preference.

The Welsh Government intends to move forward with the development of the proposals.

Changes will be made via regulations to clarify the intended scope of appeals citing a material change of circumstances, taking effect from 1 April 2023.  

Measures such as three-yearly revaluations, supporting information requirements and improvements to the administration of rating lists will be pursued in the medium term.

Powers will be sought to enable secondary legislation to implement changes in relation to reliefs, exemptions, varying the multiplier, and anti-avoidance measures. Further consultation on this is expected.

More substantial reform of NDR will not occur during this Senedd term.

Useful guides on this topic

Business Rates: What's new
The government is exploring different methods for the reform of business rates. Proposals, including three-year rating valuations and have been set out in a number of different consultations as set out below.

Welsh Land Transaction Tax (LTT)
What is Land Transaction Tax? How does it operate? What reliefs are available?

Consultation: Reforming non-domestic rates in Wales
The Welsh government has published a new consultation ‘Reforming non-domestic rates in Wales’. It looks at improvements to ensure that Welsh ratepayers contribute fairly to the services they receive and that the services ratepayers rely upon are properly funded.

External link

Consultation outcome: Reforming Non-Domestic Rates in Wales