Guidance

National non-domestic rates payment process for schools: operational guidance for billing authorities on the central payment process

Updated 20 March 2025

Applies to England

1. Introduction

This guidance is intended to support billing authorities on the central national non-domestic rates (NNDR) payment process for state-funded schools. You can check your payment process on the ‘Billing authority’ tab of the schools and academies - confirmation of your NNDR payment process 2025 to 2026 spreadsheet.

The Department for Education (DfE) pays NNDR bills directly to billing authorities that are on the central system on behalf of local authority maintained schools and academies. This includes 16 to 19 academies that are not further education (FE) providers. It is important to note this is a payment process change and not a change in NNDR policy.

2. Process for billing authorities implementing the central payment process

The NNDR online claim form opens on 1 April 2025.

Billing authorities:

• should upload claims data, using the NNDR claims template for billing authority claims (non-year specific) for all local authority maintained schools and academies within their area for the financial year 2025 to 2026 by 22 May 2025. The first payment to billing authorities will be issued on 30 June 2025. Claims submitted using the incorrect template will be rejected and may cause a delay to your payments

• should, from 23 May 2025 upload in- year adjustments to 2025 to 2026 bills. The deadline to submit in-year adjustments is 2 February 2026

• can submit prior year adjustments on previously paid claims back to 2019 to 2020 until 2 February 2026. Claims submitted after the deadline will be paid during 2026 to 2027 financial year

Reconciliation payments will be made to billing authorities at 2 points in the year:

• October 2025 - the cut-off date is 11 September 2025 for positive in-year adjustments only
• March 2026 - the cut-off date is 2 February 2026 for the end of year March payments accounting for both positive adjustments and recovery of rates funding where this applies

For any new schools that open during the year, billing authorities can upload the bill data for these schools during the adjustment period, 23 May 2025 to 2 February 2026.

Where a maintained school converts to an academy, the billing authority must ensure the existing account linked to the maintained school is closed and a new account is set up in the name of the new academy. The new academy will receive 80% rates relief from when they open. DfE will not pick up any revaluation charges that relate to the time when the academy was a maintained school.

Where an academy is part of a trust, claims should be submitted at the individual academy level. Billing authorities who are on the central payment process for 2025 to 2026 will process academy adjustments for the previous financial years.

Billing authorities should continue to issue bills to schools for information only and for local accounting purposes.

We may ask billing authorities to provide further evidence to support NNDR claims for schools where there are significant variances compared to previous years. We anticipate setting tolerance thresholds that are in line with national revaluation figures to account for changes to schools’ rateable values, thereby avoiding the need for billing authorities to unnecessarily submit additional information to DfE as evidence.

You can refer to the national non-domestic rates for billing authorities: form guidance for further instructions on how to submit a claim.

3. Eligible schools

All local authority maintained schools and academies including 16 to 19 academies that are not FE providers that deliver education will fall under the central process.

Maintained schools

1. Local authority maintained schools
2. Community school
3. Community special school
4. Foundation school
5. Foundation special school
6. Pupil referral unit (only where a prior arrangement exists)
7. Voluntary aided school
8. Voluntary controlled school
9. City technology college

Academies

1. Pre 16 academy schools
2. Special academies
3. Alternative provision academies
4. Academy 16 to 19 converter
5. Academy 16 to 19 sponsor led
6. Academy special converter (only where a prior arrangement exists)
7. Free schools
8. Free schools alternative provision (only where a prior arrangement exists)
9. Free schools special (only where a prior arrangement exists)
10. Free schools 16 to 19 (only where a prior arrangement exists)
11. Studio schools
12. University technical colleges

Early years school or post-16-provider-based provision which is part of the overall operation will continue to be funded as they have been historically under the central process. Maintained nursery schools are out of scope.

Sixth forms which are part of secondary schools will also be funded as they have been historically under the central process.

Local authorities are responsible for the NNDR payment of their closed schools. We would not fund these charges.

Rented facilities are not eligible for NNDR funding.

Billing authorities can download the list of schools and academies within their area.

4. NNDR claims activity

Table 1 below outlines the claims activity for billing authorities in submitting an NNDR claim via the online claim form.

We will undertake checks on NNDR claims and billing authorities may be asked at any point in the year to provide supporting evidence for claims.

Table 1: NNDR claims activity

Date	Activity
1 April 2025	NNDR online claim form opens for 2025 to 2026 financial year claims
1 April 2025 to 22 May 2025	Billing authorities upload bill data to NNDR online claim form
30 June 2025	NNDR payments for new claims issued to billing authorities
23 May 2025 to 2 February 2026	NNDR online claim form opens for in-year adjustments
11 September 2025	Cut-off for mid-year adjustment/revision claims
31 October 2025	Mid-year reconciliation payments (positive adjustments)
2 February 2026	Final cut-off for 2025 to 2026 adjustment claims
31 March 2026	Final reconciliation payments made to billing authorities for claims made up to 2 February 2026 (includes positive adjustments and recovery)

5. Payment timetable

Type of NNDR claim	NNDR claim submission timeframe	Payment date
New claim for financial year 2025 to 2026	1 April 2025 to 22 May 2025	30 June 2025
Adjustments for financial year 2025 to 2026	23 May 2025 to 11 September 2025	31 October 2025
Adjustments for financial year 2025 to 2026 (claims made after 11 September 2025)	12 September 2025 to 2 February 2026	31 March 2026

Billing authorities will receive a single lump sum payment by Bacs on the last working day of the month. This payment will be issued to the local authority’s main bank account.

A payment remittance will be issued to the local authority’s registered finance team prior to any payment. A claim and payment breakdown summary will be issued to the claim submitter prior to any payment. These documents should be shared internally for information purposes.

To note: where we require further evidence or clarification on NNDR claims, we will aim to process these claims within 2 months of receipt.

6. Handling of multi-use sites

DfE will cover additional rates costs associated with buildings on a school site that are used to deliver education for pupils at the school (for example, a sports hall that is used by pupils during lesson time and in the evenings by the wider community).

We will not cover the additional rates costs associated with buildings that are not used to deliver education for pupils at the school (for example, a children’s centre).

Where a school or the billing authority identifies that a split might be necessary, we advise them to contact the Valuation Office Agency (VOA) to get this assessment corrected.

We will continue to fund, as has been done historically, NNDR bills for those settings that are part of the overall school operation, such as early years and sixth form provision where they cannot be rated separately within the establishments listed in eligible schools.

Billing authorities must only upload bill data that relates to the parts of a school site that is being used to deliver education and exclude any other buildings. We will check claims to ensure they are registered with the VOA as educational premises.

Examples of these are:

• a school may have a playing field on a separate hereditament^{[footnote 1]} which is used by the school for educational purposes. The billing authority can submit a claim for this

• a school has an adjacent nursery school which is a separate hereditament^{[footnote 1]}. Maintained nursery schools are not part of the new policy change so no claim can be submitted by the billing authority. The billing authority and the school must make arrangements to cover this rates bill

• a school estate may be made up of a single hereditament^{[footnote 1]} which includes a nursery school. As it is not possible to separate this property for rates purposes, and it has been previously funded by DfE, this will continue to happen

Where there is a clear requirement for a split, the billing authority and school must work together to have this rated separately. This is not a new policy change.

Where DfE pays a portion of the bill relating to buildings used for delivering education for pupils at the school, it will remain the school’s responsibility to arrange payment with the billing authority for any additional rates costs which exceed the portion paid by DfE. The responsibility is with the school to inform the billing authority of the buildings that are used for non-educational purposes.

7. Handling of split sites

Some billing authorities may have schools that operate over more than one site. In those instances, billing authorities can record the claims amount separately for these properties on the claims template.

8. Recovery action

To prevent recovery action, DfE in agreement with the billing authorities will make a lump sum payment for rates bills by 30 June 2025 in the financial year (or, at the next reconciliation point if a claim is submitted after the initial deadline), for all schools that fall under their remit. We will also pay any adjustments to rates bills to billing authorities twice in the financial year; 31 October 2025 and the end of the financial year, 31 March 2026. These payments will be made as single lump sum.

This agreement falls within the following regulations regarding rates payments:

“a charging authority and a ratepayer may agree that the estimate of the amount payable should be paid in such a manner as is provided by the agreement, rather than in accordance with Schedule 1 [of the Regulations]”,

which requires payment by instalments.

9. Adjustments

Billing authorities can submit adjustments to DfE for previously paid claims back to financial year 2019 to 2020. Billing authorities should upload revised bill data to the NNDR online claim form, from 23 May 2025 to 2 February 2026, with lump sum payments issued by DfE on 31 October 2025 and at the end of the financial year, 31 March 2026.

We will cover the cost where historic adjustments result in increased bills, for adjustments which are raised after April 2025 and apply to bills claimed prior to April 2025.

An example of this is:

1. If the rateable value of a school site has increased due to the construction of a new building in 2024, but this increase has not been reflected in any rates bills received before April 2025.

2. In this instance, once the school informs their billing authority, they would receive an increased bill for 2025 to 2026, which would also reflect the backdated costs relating to 2024 to 2025 arising from the increase in their site’s rateable value.

3. The billing authority would upload the new bill amount to the online NNDR claim form, and DfE would cover the full cost.

For backdated adjustments, that become known after a billing authority has moved across to the central payment process and resulted in a decrease in rates bills, the responsibility to reclaim any overpayments rests with the liable party (that is, schools, or the local authority for community and voluntary controlled schools).

An example of this:

1. If a school demolished a building which resulted in a decrease to their site’s rateable value but continued to pay the original bill amount, the school would be entitled to a refund.

2. However, it remains the responsibility of the school to contact their billing authority to discharge the liability; the billing authority legally cannot get involved in an arrangement between the ratepayer and a third party (DfE) to discharge the liability.

After the initial claim has been processed for the financial year:

1. Where the rateable value decreases after the bill has been paid to the billing authority, we will calculate the date the change in the rateable value was applicable from. The overpayment by DfE will be deducted from the payment made to the billing authority for the following financial year.

2. Where the rateable value increases after the bill has been paid to the billing authority, we will calculate the date the change in the rateable value was applicable from. We will pay the billing authority the additional revised amount on 31 October 2025 if the revised bill is submitted by 11 September 2025 or on 31 March 2026 if submitted after 11 September 2025 cut-off date.

3. Any 2025 to 2026 adjustments submitted after the 2 February 2026 deadline will be paid in the following claim year.

10. Discretionary/mandatory relief

Where billing authorities already offer discretionary relief to schools in relation to their NNDR bills, or wish to do so in the future, this will continue under the new process.

The 80% mandatory rates relief applied to academies, voluntary aided schools and foundation schools will remain unchanged under the central process.

Billing authorities are reminded that any relief should continue to be applied to NNDR bills to display a net figure, ensuring that relief is deducted at source before bill amounts are uploaded so that payments are based on net liability.

11. Penalty charges

We will cover any penalty charges on late claims that arise because of a DfE error.

1. A property which is or may become liable to a rate, being a unit of such property, which is, or would fall to be, shown as a separate item in the valuation list (as defined in Section 115(1) of the General Rate Act 1967.) ↩ ↩² ↩³