The Welsh Government has approved the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025, made on 17 December 2025 and coming into force on 31 December 2025. According to this Welsh Statutory Instrument, the rules apply across three financial years from 1 April 2026 to 31 March 2029 to smooth bill increases caused by the 2026 revaluation.

Put simply, if your rates bill jumps on 1 April 2026, the rise is phased. Two thirds of the increase is stripped out in 2026/27, one third in 2027/28, and by 2028/29 the full amount is payable. The formulas recognise that the 2027/28 financial year includes 366 days because February 2028 adds a leap day.

Eligibility is tightly drawn. Relief only applies where the property was occupied on 31 March 2026, the same person remains the liable ratepayer on the relevant day, and the property stays on the rating list (local or central) continuously from 31 March 2026. It also only activates where the increase exceeds £300, and it does not apply if the billing authority has required a part‑occupation apportionment under section 44A.

The mechanics turn on two figures. The base liability is the 31 March 2026 bill, annualised. The notional chargeable amount is what you would pay from 1 April 2026 if no phasing applied. The difference between these two is the ‘increase’. The scheme reduces that increase by 67% in year one and 34% in year two before it is fully absorbed in year three.

Example one: a Cardiff café has a base liability of £12,000 and a 2026/27 notional bill of £18,000-an increase of £6,000. In 2026/27 the reduction is 67% (£4,020), so the payable becomes £13,980. In 2027/28 the reduction is 34% (£2,040), lifting the payable to £15,960 before it reaches the full £18,000 in 2028/29.

Example two: a small workshop in Wrexham moves from £5,400 to £5,650-an increase of £250. Because the rise is not more than £300, transitional relief does not apply and the workshop pays the new amount from day one.

Example three: a supermarket unit with a £120,000 base liability and a £150,000 notional bill faces a £30,000 increase. The scheme trims £20,100 in 2026/27 and £10,200 in 2027/28, so the payable steps £129,900 then £139,800 before the full £150,000 in 2028/29. For finance teams, that is meaningful working‑capital headroom in years one and two.

Continuity matters. If the occupier or liable ratepayer changes on or after 1 April 2026, relief stops from that point. If the property was unoccupied on 31 March 2026, it is outside the scheme. Where a hereditament is split and the valuation officer apportions the rateable value for part‑occupation, these transitional rules do not apply.

There is also a safeguard if liabilities fall later. If an appeal or other event reduces the chargeable amount after 1 April 2026, the notional figure used in the calculations is reset from the effective date of the change, ensuring the relief reflects the updated position rather than the original 1 April figure.

For SMEs and high‑street operators, this is not a permanent discount; it is a timing benefit that smooths cash outflows as new lists take effect. Budgeting should assume three steps: a smaller rise in 2026/27, a partial step‑up in 2027/28, then full exposure in 2028/29, with the leap year slightly affecting the second year’s daily calculation.

The 2025 regulations revoke the 2022 Welsh transitional scheme and operate alongside amounts calculated under the Local Government Finance Act 1988. The instrument was signed by Mark Drakeford, Cabinet Secretary for Finance and Welsh Language, on 17 December 2025, ahead of the 1 April 2026 lists coming into effect.

Our take: treat the scheme as short‑term working‑capital support. Lock in your 31 March 2026 occupancy and ratepayer status, and model how mergers, splits or lease changes after that date could unintentionally switch the relief off. This is a planning window, not a windfall.