Rateable values can decrease of increase fairly significantly between revaluations. This does not neceddarily mean there will be a significant change in the rates bill, as the multiplier, or Uniform Business Rate (UBR) is adjusted downwards following a revaluation to offset the overall rise in values. Some ratepayers, however, could see some dramatic changes in their rates bill - if this happens to your rates bill, it will probably be affected by transitional arrangements. Transitional arrangements soften the impact of revaluation by phasing in the changes to the rates bill over a period of time.
Different transitional arrangements will apply, depending on whether your bill has increased or decreased and whether your buisness is classed as small or large.
A small business is defined as a property with a rateable value of under £15,000 outside London and under £21,500 within London.
Transitional arrangements are based on the change in your rates bill from 2004/05 to you new rates bill in 2005/06. They are not dependant on the change in your rateable value itself.
The transition scheme, which was confirmed in December 2004, operates over a four year period. Every ratepayer will pay their true rates liability in the fifth year and many will pay it well before.
Table 1 show the proposed limits by which rates bill can increase in a single year before transitional arrangements apply:
Table 1
| Small Business | Large Business | |
| 2005/06 | 5% | 12.5% |
| 2006/07 | 7.5% | 17.5% |
| 2007/08 | 10% | 20% |
| 2008/09 | 15% | 25% |
| 2009/10 | n/a | n/a |
Slightly different arrangements apply for the proposed limits by which a rates bill can decrease in a single year, shown in table 2 below:
Table 2
| Small Business | Large Business | |
| 2005/06 | 30% | 12.5% |
| 2006/07 | 30% | 12.5% |
| 2007/08 | 35% | 14% |
| 2008/09 | 60% | 25% |
| 2009/10 | n/a | n/a |
Transitional relief is automatically calculated by your local authority and will be included in your bills for 2005/06 onwards.