The government’s transitional relief scheme phases in changes to rate bills caused by the 2023 revaluation where there has been an increase in your rateable value. The scheme is designed to limit increases for your annual rates payable.

The scheme applies only to the bill at the time of the revaluation. If there are any changes to the property after 1 April 2023, transitional relief won’t normally apply to those changes.

Changes to your bill for other reasons, such as a loss of other reliefs aren’t covered by the scheme.

How transitional relief is worked out

The percentage cap depends on whether your business is classified as small, medium or large. These percentage increases are applied before inflation is added, for example, if your rateable value is £25,000 then the increase in your bill for 2023-24 when compared to 2022-23 would be capped at 5%.

Your bill will be capped each year until applying the cap would result in a higher decrease than calculating your bill by multiplying your new rateable value by the multiplier.

All calculations for transition are based on the lower of the two government set multipliers. The supplement is the difference between the two multipliers, multiplied by the rateable value.

This year the standard multiplier is 0.512 and the small business rate multiplier is 0.499. The difference (0.512 – 0.499) is 0.13. If the 2023 rateable value is above £51,000, then the supplement is your rateable value x 0.013.