Wales has confirmed how business rates increases from the April 2026 revaluation will be phased. Ministers made the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025 on 17 December; they take effect on 31 December 2025 and run from 1 April 2026 to 31 March 2029. The instrument is published on legislation.gov.uk, approved by the Senedd, and signed by Mark Drakeford as Cabinet Secretary for Finance and Welsh Language.

The shape is straightforward. In 2026-27, 67% of any increase between your 31 March 2026 bill and your notional 1 April 2026 bill is removed. In 2027-28, 34% of that same increase is removed. From 1 April 2028 there is no transitional deduction, so you pay the full updated amount. The regulations also cap reductions so that bills cannot fall below zero.

All calculations are done on a daily basis. For the year starting 1 April 2027 the rules use 366 days to reflect the 2028 leap year, so expect small rounding differences in instalment plans. In practice, ratepayers will see the phasing through the monthly schedules issued by billing authorities.

Two anchors matter in the arithmetic. The base liability (BL) is effectively your 2025-26 annual charge as at 31 March 2026. The notional chargeable amount (NCA) is what you would have paid from 1 April 2026 if no transitional relief existed. The relief each year is a fixed percentage of the gap between NCA and BL.

Eligibility is tightly drawn. The property must appear on a local or central rating list on 31 March 2026 and on each day up to the relevant day. The same ratepayer must be liable on 31 March 2026 and later, and the property must have been occupied on 31 March 2026. If the authority has issued a Section 44A part‑occupation apportionment, transitional relief does not apply.

There is also a de minimis threshold. If the NCA is not more than £300 above the BL, the scheme does not engage. One further nuance: if your chargeable amount drops after 1 April 2026 - for example following a material change or successful challenge - the regulations reset the NCA from the date the change takes effect, and the ‘increase’ used in the calculation is recomputed from then.

Take a small café in Cardiff. If BL is £9,000 and NCA is £12,000, the increase is £3,000. In 2026-27 the 67% reduction removes £2,010, leaving £9,990 to pay. In 2027-28 the 34% reduction removes £1,020, leaving £10,980. In 2028-29 there is no reduction, so the bill reaches £12,000.

For cashflow planning, that Cardiff example translates to monthly instalments of roughly £833 in 2026-27, £915 in 2027-28 and £1,000 in 2028-29. That stepped pattern is what finance teams should mirror in budgets and covenants for 2026 through 2028.

Consider a warehouse in Wrexham. If BL is £120,000 and NCA is £180,000, the increase is £60,000. In 2026-27 the reduction is £40,200, so the payable bill is £139,800. In 2027-28 the reduction is £20,400, taking the bill to £159,600. From 1 April 2028 the full £180,000 is due.

On a month-by-month basis, that larger site would step from about £11,650 in 2026-27, to £13,300 in 2027-28, then £15,000 in 2028-29. Plotting those numbers gives a clean three-step curve, which is exactly how the regulations are designed to smooth the revaluation shock.

There are clear trip wires. Properties empty on 31 March 2026 do not qualify. Relief also falls away if the liable ratepayer changes - for example after an assignment - or if you opt for part‑occupation relief under Section 44A. Businesses weighing a regear or relocation should factor in the loss of transitional protection.

The transitional deduction is taken from the amount calculated under sections 43, 45 or 54 of the Local Government Finance Act 1988, according to the regulations published on legislation.gov.uk. In plain English, your authority works out the statutory daily charge first, then subtracts the transitional amount. Other reliefs will continue to apply per the Act and local policy.

For finance teams the checklist is simple: pull your 2025-26 closing bill and 2026-27 estimate, measure the BL–NCA gap, model the 67% then 34% phasing into 2026-27 and 2027-28, and assume the full amount from 2028-29. Confirm occupier continuity and be cautious about actions that could disqualify the property mid-stream. The 2025 regulations also revoke the 2022 version, resetting the framework for the 2026 cycle. They are in force from 31 December 2025 and run until 31 March 2029.