The Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2025
- Department: Ministry of Housing, Communities and Local Government
- Made under: Local Government Finance Act 1988
The 2025 regulations amended the 2013 Non-Domestic Rating (Levy and Safety Net) Regulations, adjusting retained rates income calculations for 2025 and correcting an error affecting North Northamptonshire.
The Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2025 amend the 2013 regulations governing the calculation of retained rates income for local authorities in England and Wales.
Key changes include adjustments to formulas for calculating retained rates income for the year beginning April 1st, 2025, specifically for authorities with 100% business rates retention and the Greater London Authority.
The regulations also correct the retained rates income calculation for North Northamptonshire, addressing an error in the 2022 regulations.
These amendments aim to improve the accuracy of calculations and ensure fair distribution of funds.
Arguments For
Improved Accuracy of Calculations: The amendments correct errors and ensure accurate calculations of retained rates income for local authorities, preventing financial discrepancies and ensuring fairness in the distribution of funds.
Support for Local Authorities: The changes to the calculation of retained rates income provide clarity and potentially additional financial support for certain local authorities, particularly those in areas with 100% local business rates retention and the Greater London Authority.
Compliance with Existing Legislation: The regulation amends existing legislation to reflect policy intentions and ensure continued compliance with the Local Government Finance Act 1988.
Arguments Against
Administrative Burden: Implementing the changes may require additional administrative work for local authorities to adjust their calculations and reporting procedures.
Unintended Consequences: The adjustments to the calculations could have unintended consequences for some local authorities, potentially leading to either unexpected gains or losses in funding.
Complexity: The amendments involve intricate formula adjustments, potentially causing confusion for local authorities responsible for these calculations.
- Citation, commencement and extent (1) These Regulations may be cited as the Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2025 and come into force on the day after the day on which they are made. (2) These Regulations extend to England and Wales.
This section establishes the name of these regulations as the Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2025.
They came into effect the day after they were made and apply to England and Wales.
- Amendment of the Non-Domestic Rating (Levy and Safety Net) Regulations 2013 The Non-Domestic Rating (Levy and Safety Net) Regulations 2013 are amended as follows.
This section indicates that the following sections will detail changes to the Non-Domestic Rating (Levy and Safety Net) Regulations 2013.
- Amendment of Schedule 1 (1) Schedule 1 (calculation of retained rates income) is amended as follows. (2) In paragraph 1(1) (calculation for billing authorities)— (a) in the definition of P, in paragraph (i), for the words “for the relevant year beginning on 1st April 2024, the amount calculated for that authority in accordance with the formula—”, substitute—“for— (i) the relevant year beginning on 1st April 2024; (ii) the relevant year beginning on 1st April 2025 where the billing authority is listed in Parts 2 to 8 of Schedule 3, the amount calculated for that authority in accordance with the formula—”; (b) In the definition of Q, in paragraph (i), for the words “for the relevant year beginning on 1st April 2024, the amount calculated for that authority in accordance with the formula—”, substitute—“for— (i) the relevant year beginning on 1st April 2024; (ii) the relevant year beginning on 1st April 2025 where the billing authority is listed in Parts 2 to 8 of Schedule 3, the amount calculated for that authority in accordance with the formula—”. (3) In paragraph 2 (calculation for major precepting authorities)— (a) in the definition of Q, in paragraph (f), for the words “for the relevant year beginning on 1st April 2024, the amount calculated for that authority in accordance with the formula—”, substitute—“for— (i) the relevant year beginning on 1st April 2024; (ii) the relevant year beginning on 1st April 2025 where the relevant authority is the Greater London Authority, the amount calculated for that authority in accordance with the formula—”; (b) in the definition of W, after paragraph (e), insert—“(f) for the relevant year beginning on 1st April 2025, the sum of the amounts of relief awarded under section 47 of the 1988 Act by all the billing authorities required to make payments to the major precepting authority for the relevant year under Part 4 of Schedule 7B to the 1988 Act, where the relief has been awarded in accordance with the following guidance issued by the Secretary of State—(i)“Business Rates Relief: 2023 Supporting Small Business Relief, local authority guidance” published on 21 December 2022, (ii)“Business Rates Relief: 2025/26 Retail, Hospitality and Leisure Scheme” published on 16 January 2025;”.
This section details amendments to Schedule 1, which outlines retained rates income calculations.
Specifically, it modifies the formulas for calculating 'P' and 'Q' for billing authorities and 'Q' and 'W' for major precepting authorities, extending the calculations to include the financial year beginning April 1st, 2025.
The calculation of 'W' now also includes rates relief awarded according to specified government guidance for the year beginning April 1, 2025.
These changes affect how retained rates income is determined for various local authorities, particularly for those with 100% local business rates retention and the Greater London Authority.
- Amendment of Schedule 6 In Column E of the Table in Schedule 6 (Table of Authorities, Business Rates Baselines, Baseline Funding Levels and Values of A and Y), in the entry corresponding to North Northamptonshire, for “67.4%” substitute “67.8%”.
This section corrects a figure (from 67.4% to 67.8%) within Schedule 6, which contains data on business rates baselines and funding levels for North Northamptonshire. This corrects an error from the 2022 regulations.
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