Welsh Ministers have confirmed a new transition for non‑domestic rates to soften the 2026 revaluation. The Non‑Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025 were made on 17 December 2025, come into force on 31 December 2025, and apply from 1 April 2026 to 31 March 2029. The instrument is published on legislation.gov.uk as WSI 2025 No. 1371.

The design is simple: it limits how quickly bills can climb. In 2026–27, 67% of the increase above a 31 March 2026 baseline is removed. In 2027–28, 34% of that initial increase is removed. From 1 April 2028 there is no reduction, so bills reflect the full underlying liability. This is transitional relief for increases only; it does not dampen decreases.

Think of a Cardiff café. If its bill before revaluation (the 2025–26 baseline) is £10,000 and its notional 2026–27 liability would be £16,000, the increase is £6,000. Year one relief removes 67% of that rise (£4,020), cutting the 2026–27 bill to £11,980. In 2027–28, a 34% reduction to that same £6,000 rise trims £2,040, so the bill would be £13,960. By 2028–29, the full £16,000 is payable. These figures are illustrative; the method mirrors the regulations.

Now a smaller change. A Swansea workshop with a baseline of £24,000 and a notional £24,250 in 2026–27 sees a £250 rise. Because the increase is not more than £300, no transitional reduction applies. If the notional bill were £26,000 instead, the first‑year relief would remove 67% of the £2,000 rise (£1,340), bringing the 2026–27 bill down to £24,660.

Eligibility is tightly defined. The property must appear in the rating list on 31 March 2026 and remain continuously listed up to each day relief is claimed. The same ratepayer who occupied the property on 31 March 2026 must still be the liable ratepayer. The property must have been occupied on that baseline date, and no apportionment for part‑occupation under section 44A is allowed. These conditions come directly from the Welsh Government’s regulations.

Two anchors sit behind the calculations. The base liability is the chargeable amount for 31 March 2026, annualised. The notional chargeable amount is the bill that would apply from 1 April 2026 without these rules, also annualised. If a downward change to liability takes effect after 1 April 2026, the notional figure is reset from that date, and the denominator reflects the actual number of days in the financial year-366 in 2027–28 because 2028 is a leap year. If a reduction would push the chargeable amount below zero, it is set to zero.

For SMEs, this is about smoothing cash outflows rather than cancelling them. The cap turns a steep, immediate step into a two‑year taper before the full post‑revaluation bill lands in 2028–29. That helps budgeting and direct‑debit planning, particularly for retailers, hospitality operators and light industrial units that face sizeable valuation uplifts.

There are also red lines to watch. A change of ratepayer or a gap in listing can switch off the relief. Businesses planning ownership or lease restructures around March–April 2026 should factor in the ‘same ratepayer’ rule, or risk losing the taper they were counting on. Where a property is removed from the list, relief ceases from the effective date of removal.

The 2025 instrument revokes the 2022 Welsh transitional rules and refreshes the framework for the new lists compiled on 1 April 2026. Mark Drakeford, as Cabinet Secretary for Finance and Welsh Language, signed the regulations on 17 December 2025, according to legislation.gov.uk. That formal sign‑off matters for councils setting bills in early spring.

Practical next steps are straightforward. Ask your billing authority for an indicative profile of 2026–27 and 2027–28 under the taper, confirm any other reliefs you rely on, and re‑baseline cash flow for two staged increases rather than one jump. If you receive a revised liability during the period-for example after a successful challenge-expect the notional figure to be reset from the day the change takes effect, as the regulations specify.