The Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2004

Explanatory Note

(This note is not part of the Regulations)

The Act provides for non-domestic hereditaments to be revalued every five years. On a revaluation new non-domestic rating lists are compiled. The next compilation date is 1st April 2005.

On each previous revaluation a transitional relief scheme has been used to protect ratepayers from large increases in their rates bills following a revaluation. These Regulations, which apply to England only, set out the rules for the transitional relief scheme which will apply to the 1st April 2005 non-domestic rating revaluation.

The purpose of the transitional relief scheme is to assist ratepayers whose bills (the notional chargeable amount) would have increased above a certain amount by phasing in these increases gradually over four years. Without such a relief those ratepayers would face the increased rates bill immediately on 1st April 2005. The scheme is funded by phasing in the reduction in bills of some ratepayers who would otherwise have seen their rates bills decrease immediately on 1st April 2005.

Part 2 of the Regulations makes provision for the determination of the substituted chargeable amount (which is the amount by reference to which a ratepayer’s liability is established) where the hereditament in question is shown in a local list or the central list (see sections 42 or 52 of the Act) and where the conditions in Part 2 are met.

Regulations 3 to 9 explain the terms used in determining whether the rules in Part 2 apply in place of the rules in section 43, 45 or 54 of the Act.

Regulation 10 specifies the cases where the principal rules, contained in regulation 11, apply for determining the chargeable amount in cases to which Part 2 applies. The principal rules are that—

(a) where NCA (notional chargeable amount, as determined under regulation 5) for a hereditament is greater than BL (base liability, as determined under regulation 6, 7 or 8) and also greater than BL multiplied by AF (appropriate fraction, as determined under regulation 9), then the chargeable amount for such a hereditament for each day will be—

where C is the number of days in the year and U is a small business rate relief correction factor; and

(b) where NCA (notional chargeable amount, as determined under regulation 5) for a hereditament is less than BL (base liability, as determined under regulation 6, 7 or 8) and also less than BL multiplied by AF (appropriate fraction, as determined under regulation 9), then the chargeable amount for such a hereditament for each day will be—

where C is the number of days in the year and U is a small business rate relief correction factor.

The appropriate fraction (AF) is different for different classes of hereditaments. Regulation 11 further provides that once the chargeable amount is calculated the mandatory reliefs (such as charitable relief and small business rate relief) are deducted.

Regulation 12 modifies the rules in relation to cases where, after 1st April 2005, there has been a change to the rateable value of the hereditament.

Regulation 13 modifies regulation 12 to apply in cases where there has been a change to the rateable value of the hereditament on 1st April 2005.

Regulation 14 modifies the rules in relation to cases where the hereditament is partly-occupied.

Regulations 15 to 18 make provision requiring the appropriate valuation officer to certify values for the purposes of the application of the rules in these Regulations, and regulation 19 provides for the procedure to be followed in the case of appeals against such certificates.

Schedule 1 deals with cases where as a result of a structural alteration a hereditament is deleted from a local list but is subsequently restored to it on or after 1st April 2005.

Schedule 2 makes provision, in place of Part 2, for cases where a hereditament splits, or is merged with one or more other hereditaments whether that split or merger occurs on or after 1st April 2005.