A Bill to reform the local tax system in Wales, including non-domestic rates and council tax, has this week (16 July 2024) been passed by the Senedd.
The Local Government Finance (Wales) Bill establishes a series of changes to improve the tax systems. It will make them fairer and work better for the future needs of Wales, by ensuring local taxes reflect economic circumstances more regularly.
For non-domestic rates (also known as business rates), the Bill will:
- increase how often the values of all non-domestic properties in Wales are updated, to once every three years;
- provide more flexibility to make changes to reliefs and exemptions;
- enable changes to the calculation of payments for different categories of ratepayers;
- close known tax avoidance arrangements and increase the ability to tackle future avoidance in a more responsive way;
- enable improvements to the information provided by ratepayers.
In relation to council tax, the Bill will:
- establish a five yearly cycle of property revaluations from April 2028 onwards, and allow Welsh Ministers to amend future revaluation years should circumstances require this;
- provide more flexibility for the organisation and labelling of tax bands if required, to fit future possible redesigns of the system;
- ensure the continuation of our national Council Tax Reduction Scheme, providing essential financial help to low-income households;
- provide more flexibility to make changes to discounts and persons disregarded from paying council tax.
Cabinet Secretary for Finance, Constitution and Cabinet Office, Rebecca Evans, said:
This is the first Welsh local government finance bill since devolution. It introduces important changes to the local tax system in Wales, reforming the system to make it more consistent, effective, and to give us flexibility in the future. Extensive research and experience of operating the current systems for more than two decades highlighted a range of limitations and the case for change was clear.
With the Bill now being approved by the Senedd, we will have a framework designed for modern Wales, and the necessary levers to adapt local taxation in the future as circumstances and priorities change.
