additional help for small companies, the government announced today.
Announcing that business ratepayers in England would benefit from a
transitional relief scheme as part of the 2000 revaluation, local
'Today I have issued a consultation paper which seeks views from
businesses on options for transitional relief. Under revaluation,
which takes place by law every five years, many ratepayers will see
their bills fall, but the minority of ratepayers facing significant
increases will need time to adjust.
'This means that we will therefore set limits on the amount anyone's
bill can increase in each year. As on previous occasions there will
also have to be limits on the annual decreases in the bills of those
whose bills fall significantly after the revaluation in order to help
fund the limits on bill increases. We recognise that there may also
need to be a modest exchequer contribution towards the cost of a
transitional relief scheme, particularly in the first year after
The law requires that revaluations must be carried out
every five years, to ensure that non-domestic rates are fairly
distributed between businesses across England, to reflect relative
changes in the property market. The total amount collected remains
broadly constant in real terms. As a result, some rate bills will go
down, while others will go up.
This is the third such revaluation since the national non-domestic
rate was introduced in 1990.
As a means of helping small businesses, we propose that there should
be tighter limits on increases in the bills of small properties than
on those for large properties. We also propose that more generous
reductions should be allowed to small properties benefiting from the
Details of the final transitional relief scheme will be announced in
November, in the light of comments received in response to the
1. Five yearly revaluations of the 1.6 million non-domestic
properties in England are required under the Local Government Finance
Act 1988. Their purpose is to re-distribute the rate burden in line
with movements in the open market rental values of property. They
keep the total amount of rates paid in England broadly constant in
real terms. The next revaluation takes effect on 1 April 2000, based
on rental values as at 1 April 1998. The revaluation will not affect
the council tax.
2. The full details of the effects of the revaluation will not be
available until the end of this year. But it is likely that there
will be an increase in the total rateable value for England of around
20% - reflecting the overall improvement in the economy since the
last revaluation in 1995. In order to ensure that the revaluation
keeps the total amount of rates paid in England broadly constant in
real terms, the National Rate Multiplier (poundage) for England will
have to be reduced. A provisional calculation of the Multiplier for
2000/01 will be announced in November.
3. Copies of the consultation paper are available from Edward
Stanislas (Zone 5/J1, Eland House, tel 0171 890 4216, e-mail:
4. The closing date for comments is 4 November.