Business Rates

Transitional Arrangements

Rateable Values can increase or decrease following a general revaluation. Transitional arrangements phase in the effects of these changes by limiting the amount a bill can increase.

To help pay for the limits on increases in bills, there also have to be limits on the reduction in bills.

Different transitional arrangements will apply, depending on whether your bill has increased or decreased, and whether your business is classed as small or large.

A small business is defined as a property with a rateable value of under £15,000 outside London and under £21,500 within London. For the purposes of these arrangements, Barking and Dagenham is considered to be within London.

Transitional arrangements are based on the change in the rates bill from 2004-2005 to the rates bill for 2005-2006. They are not dependent on the change in the rateable value itself.

The transitional scheme operates over a 4 year period. Every ratepayer will pay their true rates liability in the fifth year and many will pay it before this.

A new transitional calculation is made at the start of each financial year to determine if a property still falls within the scheme.

The scheme only applies to properties included in the Non-Domestic List at the time of the revaluation, which is 31 March 2005. If there are any changes to the property after this time transitional arrangements will not normally apply.

This shows the proposed limits by which a rates bill can increase in a single year before transitional arrangements apply.

2005-2006

Small Business: 5%

Large Business: 12.5%

2006-2007

Small Business: 7.5%

Large Business: 17.5%

2007-2008

Small Business: 10%

Large Business: 20%

2008-2009

Small Business: 15%

Large Business: 25%

2009/2010

Small Business: Not applicable

Large Business: Not applicable

This shows the proposed limits by which a rates bill can decrease in a single year before transitional arrangements apply.

2005-2006

Small Business: 30%

Large Business: 12.5%

2006-2007

Small Business: 30%

Large Business: 12.5%

2007-2008

Small Business: 35%

Large Business: 14%

2008-2009

Small Business: 60%

Large Business: 25%

2009-2010

Small Business: Not applicable

Large Business: Not applicable

These limits are also adjusted on a yearly basis to take into account fluctuations in inflation. This inflation factor is determined by comparing the current and previous Small Business Multipliers.

2006 Inflation Factor 1.026

2007 Inflation Factor 1.035

Contact

Business Rate Section (NNDR)

Revenues and Benefits

90 Stour Road

Dagenham

RM10 7JD

Tel: 020 8227 2934

Fax: 020 8227 2089

Email: nndr@lbbd.gov.uk|

Reception hours:

Monday to Friday, 8.30am - 5pm