Part 5: Transitional Relief
The Valuation Office Agency's (VOA) technical manual for the rating of business (non-domestic) property.
Transitional relief is a way of reducing the immediate impact of Revaluations to enable businesses in sectors where rental values and therefore rateable values have significantly increased since the previous valuation list time to adjust to their increased tax liability.
It was introduced back in 1990 following the first revaluation since 1973, in which time rents in parts of the country and in some sectors had increased massively with other areas and sectors seeing very little rental growth. To cushion the impact of the revaluation a transitional relief scheme was devised. Wales discontinued a transitional relief scheme after the 1995 revaluation, England has continued to apply a transition scheme to each new list.
So transitional relief only applies to England and currently has two schemes, one for the 2017 list and one for the 2023 list.
Whenever the list entry for a hereditament is incorrect at any of these dates and cannot be amended the VO must certify what the list value should have been.
The legislation, regulations and explanations for when and how to serve a certificate can be found for each scheme on the following pages.
Transition is applied by comparing either the rateable value or certified value for a hereditament on the last day of a list with the rateable value or certified value for a hereditament on the first day of the next list.
The Billing Authorities then apply the appropriate adjustments to calculate the rate demand that is sent to the ratepayer.
Please direct any queries you have regarding transitional relief to the Litigation and Technical Policy Team via the green button on the Non Domestic Rating Homepage.
Billing Authorities are responsible for the administration and calculation of the rate liabilities and they apply the transition rules. In order to do so for the 2017 Rating List they need to compare like with like, as at 31 Mar 2017 and 1 Apr 2017.
Transitional arrangements for England applicable to the 2017 rating lists and the relevant statutory provisions are contained in:
The Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2016 SI No 1265
Regulation 14 –
Changes in rateable value occurring on 1 April 2017
Where the RV shown in a list for 1 April 2017 is affected by a change in relevant factors [a material change of circumstances (MCC) or the extent to which the property is exempt] that actually occurs on 1 April 2017 the VO must certify the RV that would have been shown for 1 April 2017 on the assumption that the factors applicable on 31 March 2017 had continued to apply (i.e. that the MCC or change in exemption had not taken place).
Regulation 15 –
Partly occupied hereditaments apportioned under s44 certificates, transitional relief is calculated by BA, and is based upon s44 apportionment.
Regulation 16 -
Inaccuracy in the Rateable Value shown for 1 April 2017
This regulation requires the VO to certify that a) it applies and b) the correct RV for 1 April 2017 if the VO is of the opinion that the RV shown for that day is inaccurate for any reason other than solely due to an MCC occurring on that day [in which case see Reg 14 above].
It is most likely to be necessary where the VO has increased the RV due to a compiled list inaccuracy and the effective date of that increase has been restricted to the day the list was altered by the VO by regulation 14(7) of the Non-Domestic Rating (Alteration of Lists and Appeals)(England) Regulations 2009 SI No 2268. All other errors in the compiled list are capable of being corrected by alteration of the list itself and certification will not be necessary. Even though such a certificate may result from an increase in rateable value there is no need to seek the consent of, or a request from, the ratepayer before issuing the certificate.
Regulation 17 –
Inaccuracy in the Rateable Value shown for 31 March 2017
This certificate is used when the VO is of the opinion that the RV shown for a hereditament for 31 March 2017 is inaccurate and the list cannot be amended the VO must certify that a) regulation 17 applies and b) the RV that should have been shown for that day.
Where the RV certified is greater than the RV shown in the list for 31 March 2017 it will only have effect from either: 1.the date from which any certificate issued under regulation 16 has effect. 2.where no regulation 16 certificate has been issued then the regulation 17 certificate will have effect from the day it is issued.
Where the RV so certified is less than the RV actually shown in the list for 31 March 2017 the certified value has effect for liability from 1 April 2017.
Regulation 18 – Splits, Mergers and Reconstitutions actually occurring prior to 1 April 2017
This certificate is applicable where the actual day on which a split, merger or reconstitution took place was prior to 1 April 2017, but the new hereditament(s) is/are first shown in a list on 1 April 2017. The VO must certify a) that regulation 18 applies and b) the RV(s) applicable for the new hereditament(s) if it/they had been shown in a list for 31 March 2017. In most cases the values to be certified will be the original rateable value(s) shown in the 2017 compiled list prior to the list alteration which reflects the split, merger or reconstitution.
The VO has the power until 31 March 2018 to alter the 2010 list to show new hereditaments arising from these circumstances so there was no need to issue regulation 18 certificates until after 1 April 2018.
Schedule 1 – Altered hereditaments
This certificate will apply to a hereditament which is shown in a 2017 rating list for the first time, but it must consist wholly or mainly of property which was at least part of a hereditament previously shown in the 2010 list and that original hereditament must have been deleted because of structural alterations.
If these conditions apply, then when the ‘new’ hereditament is first shown in the 2017 list a certificate may be necessary. The certificate must show what the 31 March 2017 rateable value (i.e. a 2010 list assessment) would have been for that ‘new’ hereditament, but importantly reflecting the matters mentioned in para 2(7) of Sch 6 to the 1988 Act as they are on the material day for the 2017 list new entry.
Whilst Schedule 1 does not distinguish between properties in upward or downward phasing, a certificate will actually only have effect if the property is in downward phasing.
Schedule 2 – Splits, Mergers and Reconstitutions occurring on 1 April 2017
The only occasion a VO needs to provide a certificate under this Schedule is when a split, merger or reconstitution of hereditaments actually occurs on 1 April 2017. The certificate is of the rateable value(s) that would have been shown for 1 April 2017 but in respect of the hereditament(s) and facts that existed on 31 March 2017.
Regulation 20 provides that:
(1) The appropriate valuation officer (“the AVO”) must certify the rateable values which fall to be certified by the AVO under these Regulations as soon as practicable after the circumstances calling for the certification come to the AVO’s attention (whether by virtue of an application by the billing authority, the Secretary of State, the ratepayer or otherwise).
(2) Where, whether by reason of a decision of the Valuation Tribunal for England or otherwise, the AVO forms the opinion that a certificate under these Regulations (other than such a certificate which has been confirmed on appeal) is inaccurate, the AVO must certify the rateable value which in the AVO’s opinion should be substituted for the rateable value originally certified.
(3) A certificate under paragraph (2) has effect in place of the previous certificate, and any appeal against the previous certificate under regulation 21 is taken to be withdrawn.
(4) The AVO must send a copy of the certificate to—
(a) the billing authority or, so far as it relates to a liability under section 54 of the Act, the Secretary of State; and
(b)the ratepayer.
(5) The copy of a certificate sent to a ratepayer under paragraph (4) may be sent to—
(a)the ratepayer’s last known address; or
(b)the address of the hereditament.
(6) The copy of a certificate sent to a ratepayer under paragraph (4) must be accompanied by—
(a)a statement of the effect of regulation 21, and
(b)for a value certified under paragraph (2), a statement of the effect of paragraph (3).
(7) A certificate issued under these Regulations—
(a)must be retained by the AVO who issued it; and may be inspected by any person at any reasonable time.
The Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2022 SI No.1403.
Changes in rateable value actually occurring on 1 April 2023.
Where the RV shown in a list for 1 April 2023 is affected by a change in relevant factors [a material change of circumstances (MCC)] or the extent to which the property is exempt] that actually occurs on 1 April 2023 the VO must certify the RV that would have been shown for 1 April 2023 on the assumption that the factors applicable on 31 March 2023 had continued to apply (i.e. that the MCC or change in exemption had not taken place).
Partly occupied hereditaments apportioned under s44A certificates, transitional relief is calculated by BA, and is based upon s44A apportionment.
Inaccuracy in the Rateable Value shown for 1 April 2023.
This regulation requires the VO to certify–
a) that it applies, and b) the correct RV for 1 April 2023,
if the VO is of the opinion that the RV shown for that day is inaccurate for any reason other than solely due to an MCC occurring on that day [in which case see Reg 16 above].
It is most likely to be necessary where the VO has increased the RV due to a compiled list inaccuracy and the effective date of that increase has been restricted to the day the list was altered by the VO by regulation 14(7) of the Non-Domestic Rating (Alteration of Lists and Appeals)(England) Regulations 2009 SI No 2268. All other errors in the compiled list are capable of being corrected by alteration of the list itself and certification will not be necessary. Even though such a certificate may result from an increase in rateable value there is no need to seek the consent of, or a request from, the ratepayer before issuing the certificate.
Inaccuracy in the Rateable Value shown for 31 March 2023.
This certificate is used when the VO is of the opinion that the RV shown for a hereditament for 31 March 2023 is inaccurate and the list cannot be amended. The VO must certify –
a) that regulation 19 applies, and b) the RV that should have been shown for that day.
Where the RV certified is greater than the RV shown in the list for 31 March 2023 it will only have effect from either:
- the date from which any certificate issued under regulation 18 has effect.
- where no regulation 18 certificate has been issued then the regulation 19 certificate will have effect from the day it is issued. Template certificate VO7635, VO7635A
Where the RV so certified is less than the RV actually shown in the list for 31 March 2023 the certified value has effect for liability from 1 April 2023.
Regulation 20: splits, mergers and reconstitutions occurring prior to 1 April 2023
This certificate is applicable where the actual day on which a split, merger or reconstitution took place was prior to 1 April 2023, but the new hereditament(s) is/are first shown in a list on 1 April 2023. The VO must certify –
a) that regulation 20 applies, and b) the RV(s) applicable for the new hereditament(s) if it/they had been shown in a list for 31 March 2023.
The VO has the power until 31 March 2024 to alter the 2017 list to show new hereditaments arising from these circumstances so there is no need to issue regulation 20 certificates until after 1 April 2024.
Schedule – Splits, Mergers and Reconstitutions actually occurring on 01 April 2023
The only occasion a VO needs to provide a certificate under this Schedule is when a split, merger or reconstitution of hereditaments actually occurs on 1 April 2023. The certificate is of the rateable value(s) that would have been shown for 1 April 2023 but in respect of the hereditament(s) and facts that existed on 31 March 2023.
In most cases the values to be certified will be the original rateable value(s) shown in the 2023 compiled list prior to the list alteration which reflects the split, merger or reconstitution.
Note that as 1 April 2023 is a Saturday it is likely that these certificates will not be commonplace.
Regulation 23 provides that:
(1) The appropriate valuation officer (“the AVO”) must certify the rateable values which fall to be certified by the AVO under these Regulations as soon as practicable after the circumstances calling for the certification come to the AVO’s attention (whether by virtue of an application by the billing authority, the Secretary of State, the ratepayer or otherwise).
(2) Where, whether by reason of a decision of the Valuation Tribunal for England or otherwise, the AVO forms the opinion that a certificate under these Regulations (other than such a certificate which has been confirmed on appeal) is inaccurate, the AVO must certify the rateable value which in the AVO’s opinion should be substituted for the rateable value originally certified.
(3) A certificate under paragraph (2) has effect in place of the previous certificate, and any appeal against the previous certificate under regulation 24 is taken to be withdrawn.
(4) The AVO must -
(a) notify the billing authority or, so far as it relates to a liability under section 54 of the Act, the Secretary of State, of the effect of the certificate; and
(b) send a copy of the certificate to the ratepayer.
(5) The copy of a certificate sent to a ratepayer under paragraph (4) may be sent to -
(a) the ratepayer’s last known address, or
(b) the address of the hereditament.
(6) The copy of a certificate sent to a ratepayer under paragraph (4) must be accompanied by -
(a) a statement of the effect of regulation 24, and
(b) for a value certified under paragraph (2), a statement of the effect of paragraph (3).
(7) A certificate issued under these Regulations -
(a) must be retained by the AVO who issued it; and
(b) may be inspected by any person at any reasonable time.
Regulation 24 – Appeals against certificates
(1) Where an interested person in relation to a hereditament in respect of which a value is certified by an appropriate valuation officer under these Regulations is dissatisfied with the value so certified, the interested person may appeal against the certificate in accordance with this regulation.
(2) An appeal under paragraph (1) is made by serving a notice on the appropriate valuation officer stating the appellant’s reasons for being dissatisfied.
(3) A notice mentioned in paragraph (2) must be served within the period of 6 months beginning with the date on which the certificate was issued.
(4) Unless–
(a) the notice is withdrawn, or
(b) the appropriate valuation officer and the appellant agree in writing as to the value which should be certified,
the disagreement must be referred by that officer to the Valuation Tribunal for England as an appeal against that certification.
(5) Parts 2, 4 and 5 of the Appeals Procedure Regulations apply in relation to an appeal under this regulation.
(6) For the purposes of paragraph (1), “interested person” has the meaning given in the Appeals Procedure Regulations.
Appeals against Certificates of Value for Transitional Purposes
1. General
i) A right of appeal by an “interested party” dissatisfied with the value certified for transitional purposes is conferred for the 2010 List by Regulation 18 of the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2009 SI 3343.
And for the 2017 List by Regulation 21 of the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2016 SI 1265.
Parts 2,4 and 5 of the Appeals Regulations (general provisions relating to appeals) shall apply in relation to such an appeal - Regulation 2 of the Regulations states that an “interested person” in relation to a hereditament means the occupier and any other person (other than a mortgagee not in possession) having in any part of the hereditament:-
a) a legal estate or
b) an equitable interest such as would entitle him (after the cessation of any prior interest) to possession of the hereditament or any part of it.
ii) VO’s Certificates of Value may have been made following a request from a ratepayer, Billing Authority, Secretary of State or otherwise. It is not a prerequisite for an appeal by an interested party that he or she must have received a copy of a VO’s certificate. Certificates should be served upon the occupier and the Billing Authority. Duplicate certificates to agents or 3rd parties should not be issued, and only in very limited circumstances may a certificate be served on an agent rather than the occupier, and not before obtaining advice from your Technical/CEO Rating Advisor.
Note; appeals are against the Certificate of Value not the decision to certify or in fact the decision not certify
iii) Revoked Schemes – There is no further requirement for the VO to certify the 1990 scheme in England after 1 November 2003.
Regulation 20 of the Non-Domestic Rating (Transitional Period) (Amendment) (England) Regulations 2004 SI No. 3387 revoked Regulations 35 and 36 of the Non-Domestic Rating (Chargeable Amounts) Regulations 1994 SI No. 3279; which related to the certificates and appeals against certificates for the 1995 scheme, therefore there is no longer any requirement in England to certify values for the 1995 list after 22 December 2004.
Regulation 19 of the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2009 SI No. 3343 revoked Regulations 36 and 37 of the Non-Domestic Rating (Chargeable Amounts) Regulations 1999 SI No. 3379; which related to the certificates and appeals against certificates for the 2000 scheme, therefore there is no longer any requirement in England to certify values for the 2000 list after 17 December 2009.
Regulation 21 of the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2016 SI No. 1265 revoked regulations 18 and 19 of the Non-Domestic Rating (Chargeable Amounts) Regulations 2004 SI No. 3387; which related to the certificates and appeals against certificates for the 2005 scheme, therefore there is no longer any requirement in England to certify values for the 2005 list after 1 April 2017.
iv) Wales – contact the Technical Advice team in respect of 1990 and 1995 transitional certificate appeals received in Wales.
2. Time Limits for Service of an Appeal on the VO
i) There is no time limit for an appeal against a 2010 list or 2017 list Transitional Certificate, whilst the schemes are in force.
3. 2005 list Transitional Certificate Appeals received out of time
The same policy adopted for out of time proposals should be adopted for out of time certification appeals. The appellant should be informed that the appeal is considered invalid by using VO 7068.
4. Method of Appeal
i) The Regulations do not prescribe any statutory requirements for a Notice of Appeal, except that the appellant should state the “reasons for being dissatisfied”. The quality of appeals received by VOs may vary considerably and VOs should adopt a common sense approach concerning their completion, especially when they are in the form of a letter.
ii) An appeal should be in writing and contain the following information:
c) the address of the hereditament;
d) the name and address of the person making the appeal; and
e) the reason(s), for dissatisfaction.
As a general principle, the benefit of doubt as to the validity of an appeal should be given to the appellant.
iii) The appeal must be served on the appropriate VO.
iv) Form VO 7063 has been produced to assist appellants in making appeals against VO’s certificates and the use of this form should be encouraged. Notices of Appeal, in the form of letters, once accepted, should be attached to a blank form VO 7063.
5. Hereditaments not in VO’s Area
i) Where a Notice of Appeal is received for a hereditament not situated within the VO’s area, it should generally be returned to the sender with an explanatory letter stating that the notice has not been properly served, and giving the name and address of the relevant VO to whom the notice should be sent.
ii) Care will be required by VO’s when supplying names and addresses of VOs affected by Branch Restructuring to ensure that the correct information is supplied. Additional vigilance will be required by VOs when offices are about to close, or have closed, or the statutory time-limit for the service of appeals on the VO is soon due to expire. If in these cases, through no fault of the appellants the Notice of Appeal has in good faith been served on the incorrect VO, it should be accepted on behalf of the appropriate VO. The Notice of Appeal should be date stamped with the Official Office Date stamp to show the date the Notice was received by that office and forwarded on, informing the appellant accordingly. The receiving VO, on receipt of the redirected Notice of Appeal, should take the date of receipt as the date received by the first VO.
6. Action on Receipt of a Notice of Appeal
i) Whenever a Notice of Appeal has been received by a VO, the following action should be taken;
f) Check that the property referred to in the appeal is within the VO’s area. If outside the VO’s area, see para 5.
g) Date stamp the Notice of Appeal immediately on receipt (using the official office date-stamp).
h) Acknowledge receipt of the Notice of Appeal using VO 7065.
ii) A copy of each Notice of Appeal should be sent to the appropriate Billing Authority concerned, marked for “Information Only”. This action will inform the Billing Authority of a pending appeal against the certified RV being used by the authority for transitional purposes and enable them to deal with any correspondence received from the appellant concerning transitional relief.
7. Filing of Documents
When a Notice of Appeal has been registered, all documents should be placed in EDRM within the assessment folder for the property address. The TL should be notified of the appeal by email in order that they can allocate it to a caseworker.
8. National Specialist Unit Cases
When a Notice of Appeal is received for a property dealt with by a Specialist NSU Valuer the documents should be placed in EDM under the property assessment folder and an email sent to the NSU mailbox for allocation to the correct caseworker. ie Specialist Valuation Unit, Group A Valuer, MV or LPV(L), it will be necessary to transmit the Appeal, and all other papers, in the plastic wallet to the Specialist Valuer concerned.
9. Transmission of Appeal Papers to the VT
i) General
The transmission of papers relating to Transitional Certification appeals to the VT is dealt with manually. VOs should nominate a member of staff to be the VT contact for the manual transmission of appeals and the VT will also appoint a contact.
Names, email addresses, telephone numbers and extensions should be exchanged.
ii) Time Limits
Unless the appeal against the certified value is withdrawn or agreement as to the value which should be certified is reached between the VO and the appellant, within four weeks of the date the appeal was served on the VO, the papers should be transmitted to the VT at the expiry of the four weeks.
A regular check should be made of the control binders to ensure that transmission dates are not missed.
iii) Transmission of Documents to VT
Transmission of Documents notice VO 7064 should be completed.
One copy, together with a copy of the VO certificate and the Notice of Appeal, should be transmitted to the VT.
Where a Notice of Appeal is received against an entry in the certified Advance List offices should photocopy the sheet where the entry appears, underlining, or highlighting, the appropriate entry, together with the signed Certification, for transmission with the Notice of Appeal to the VT.
Form VO 7064 should be completed in the following manner:-
Reference Serial No. - The VO should assign a reference serial number to all manually transmitted appeals. The serial number will consist of an alpha and numeric reference. RM Transitional Relief; Appeals; Appendix 7 provides local offices with their individual alpha two-character code. The numbering for the numeric reference should run consecutively throughout the office irrespective of the number of VTs or BAs covered. Outstanding appeals received by an Importing office from an Exporting office, under Branch Restructuring, should continue to refer to the Exporting Office’s alpha/numeric code until such time as all appeals received from the Exporting Office have been settled.
To the Clerk of the VT - Enter the name of the VT dealing with the Billing Authority where the property is situated.
Billing Authority - Enter the name of the Billing Authority where the property is situated.
Asst Number/Address - Enter the assessment number and address which appears in the Rating List for the property concerned.
VO Certificate dated - Enter the date of the certificate or the certification of the Advance List.
Notice of Appeal dated - Enter the date of the Notice of Appeal. Space is provided for the date of more than one notice.
iv) When form VO 7064 has been checked for accuracy, the VO’s name and the date of transmission of the relevant documents should be stamped on the form. The relevant papers should then be forwarded to the VT.
Acknowledgement of receipt of VO 7064, and the accompanying documents, by the VT, will be verified by telephone to the local VO office contact (see para 9(I)).
10. Inspections
Where an appeal has been made against a Certificate of Value, the facts should be checked and, if possible, agreed when dealing with the appeal before any VT hearing.
11. Settlement of Appeals
i) Withdrawal of Appeals
An Appeal can be withdrawn by the maker at any time before the commencement of a hearing by the VT. A Withdrawal Form VO 7067 (RM Transitional Relief; Appeals; Appendix 8) has been provided for this purpose, but a letter, containing the same information, will also suffice.
Copies of the withdrawal should be made and sent to the Billing Authority (see Para 6(b)(ii)) and to the VT, if the appeal has been transmitted (quoting the reference serial number).
ii) Settlement of Appeals by Agreement
An agreement between the VO and the appellant can be made at any time before the commencement of a hearing by the VT. An agreement form VO 7066 (RM Transitional Relief; Appeals; Appendix 9) has been provided for this purpose.
A copy of the agreement should be made and sent to the Billing Authority (see Para 6(b)(ii)). A copy should also be sent to the VT, if the appeal has been transmitted (quoting the reference serial number).
An amended TR certificate should be issued at the agreed figure to the Ratepayer with a copy to the Billing Authority.
iii) Involvement of an “interested person” in further appeals
It should be noted that an “interested person” has 1 year in which to serve on the VO a notice against a certificate of value. An occasion could therefore arise where the VO has already agreed a revised rateable value to the satisfaction of the first appellant before receiving a further Notice of Appeal from a second appellant. Where this circumstance arises, the VO should involve the first appellant in any subsequent revised agreement or VT hearing even though the regulations do not cover this situation.
12. Cases Heard by VT
When a case is to be heard, the date of the hearing by the VT will be notified to the VO by the Tribunal Clerk, (not less than four weeks prior to the hearing). Upon receipt of a VT decision, the caseworker should endorse the Working Docket (see RM 3:20) accordingly and pass all files through to the relevant sections for appropriate action (see RM 3:20:12).
This scheme is now closed. It was revoked on 1 April 2023. No further 2010 scheme certificates should be produced.