
PRESTON TAIT  2000 TRANSITION ENGLAND 
TRANSITION
Transition can be a penalty or a subsidy depending on whether
the R.V. has increased (losers) or decreased (gainers).
Actual increases or decreases in rates payments due to a change in R.V.
will be geared to the previous years liability.
The original idea of transition was to spread the impact of revaluation
more evenly. Those to pay less capped in order to help those who should
be paying more.
Each year any property suject to transition also has it's rates bill increased
by inflation as follows:
2000  2001 
1.1% 
2001  2002 
3.3% 
2002  2003 
1.7% 
2003  2004 
1.7% 

What are transitional arrangements and
why do we have them?
Property values normally change a good deal between each revaluation.
Transitional arrangements help to phase in the effects of these
changes on ratepayers’ bills. To help pay for the limits
on increases in bills after a revaluation, there also have to be
limits on reductions in bills.
The transitional scheme introduced in England following the revaluation
in 2000 make sure that each Business Rates bill did not change beyond
certain limits in 2000/01 because of the revaluation. Many bills
changed by less than these amounts and the final amount depended
on a number of things that are described more fully in the next section.
Under the transitional relief scheme, limits continue to apply to
yearly increases and decreases in the following years over the life
of the scheme until the full new amount is due (rateable value times
the multiplier).
This applies only to the bill based on your property at the time
of the revaluation. If there are any changes to the property after
the revaluation date, transitional arrangements will not normally
apply to the part of your bill that applies to any increase in rateable
value due to those changes.
How are increases limited?
Transitional limits apply if, in any year, the amount you would have
to pay (based on your rateable value times the multiplier) is higher
than the previous year’s bill (based on the amount due on 31
March) by more than the amounts shown below. If this is the case,
your bill will be increased by these amounts.
Year 
Small property
(rateable value of less than £12,000 or £18,000 in Greater London) 
Large property
(all others) 
2000/01 
5% 
12.5% 
2001/02 
7.5% 
15% 
2002/03 
7.5% 
17.5% 
2003/04 
7.5% 
17.5% 
2004/05 
7.5% 
17.5% 
But remember, after these limits have been applied to your bill, your
bill will still increase in line with inflation. This is based on the
retail price index in the previous September. Inflation was 1.1% for
2000/01 and 3.3% for 2001/02.
Are reductions in bills limited too?
Yes. Transitional limits also apply if, in any year, the amount you
would have to pay (based on your rateable value times the multiplier)
is lower than the previous year’s bill (based on the amount due
on 31 March) by more than the amounts shown below. If this is the case,
your bill will be reduced by these amounts.
Year 
Small property
(rateable value of less than £12,000 or £18,000 in Greater London) 
Large property
(all others) 
2000/01 
5% 
2.5% 
2001/02 
5% 
2.5% 
2002/03 
10% 
5% 
2003/04 
12.5% 
7.5% 
2004/05 
25% 
15% 
But remember, after your bill has been reduced by these limits, your
bill will still increase in line with inflation. This is based on the
retail price index in the previous September. Inflation was 1.1% for
2000/01 and 3.3% for 2001/02, 1.7 
WHERE TRANSITION IS NOT APPLICABLE
 DEMOLITIONS ETC.
Any reduction to a rateable value with an effective date after 1st April
due to a part demolition of the premises or some other alteration will
have the ratio of that reduction applied to rates payments so that for
example where a property had been increased in value by 10 times at the
revaluation but was subject to transition ( where the actual payments were
only increased by 10%) , a demolition of half of premise would lower the
rates bill by a half, whereas any reduction as a result of an appeal with
a 1st April effective date may have made no difference to payments. This
is known as an N over J fraction.
(N being the revised value, J being the original value). EXAMPLE
Property at £10,000 in 1999 increased to £100,000
in year 2000.
Rates payments only increased from £4,890 by 10% plus inflation to £6,454.
Property then half demolished in May 2001 reducing the rateable value to £50,000.
By N over J (£50,000 over £100,000) the rates payments are reduced by a
half with effective date 1st May 2001.
If the property had been overvalued and
appealed to £50,000 as at 1st April
2000 (with no demolition having taken place) the new theoretical liability
would be £50,000 at 41.6 pence or £20,800 still way above the transition
limit of £6,454 with no immediate difference to payments. 
ENGLAND INCREASES IN RATEABLE VALUE
SMALLER PROPERTIES (RV under £12000) For those faced with an increased rateable
value the drop in the uniform business rate will help to offset
any increase in valuation. In any
event payment will not increase by more than 5% plus inflation for
small properties (under £12,000 or £18,000 in London) in the first
year of the revaluation.
Example: 1999 payment R.V. £8,000 @ 48.9p Paid £3,912
2000 Revaluation R.V. increased to £12,000
£
12,000 @ 41.6p Payable £4,992
But limit £3,912 plus 5% = £4,108 (plus inflation) LARGER PROPERTIES For those faced with an increased rateable
value (properties over £12,000
or £18,000 in London) the drop in the uniform business rate will help to
offset any increase in valuation. In any event payment will not increase
by more than 12.5% in the first year of the revaluation rising to 17.5%
in the later years.
Example: 1999 payment R.V. £27,000 @ 48.9p Paid £13,203
2000 Revaluation R.V. increased to £46,000
£
46,000 @ 41.6p Payable £19,136
But limit £13,203 plus 12.5% = £14,853 (plus inflation) 
ENGLAND DECREASES IN RATEABLE VALUE
SMALLER PROPERTIES (1999 Value Under £12,000 or £18,000
in London)
Unfortunately those who have a reduction in their R.V. will hardly
benefit as the limit on payment for small properties will be a 5% drop
on the previous years bill with inflation added back. This for the
first two years of the revaluation.
Example: 1999 payment R.V. £10,000 @ 48.9p Paid £4,890
2000 Revaluation R.V. decreased to £9,000
£
9,000 @ 41.6p Payable £3,744
But limit £4,890 less 5% = £4,646 plus inflation. LARGER PROPERTIES (over £12000 (£18000
in London)
The situation is even worse for large properties with a decreased valuation
where the limit on any reduction in payment is 2.5% added back for the
first two years then rising to a 5%, 7.5% and finally 15% allowable drop.
Larger properties therefore with a no change or decreased value will not
be allowed to pay less and may still be paying more than the preceding
year's bill if inflation is over 2.5%!
Example: 1999 payment R.V. £46,000 @ 48.9p Paid £22,494
2000 Revaluation R.V. decreased to £26,000
£
26,000 @ 41.6p Payable £10,816
But limit £22,494 less 2. 5% = £2,190 plus inflation. 
