Senedd Passes Local Government Finance (Wales) Bill to Reform Tax System

​Last week on the 16th July, the Senedd approved the Local Government Finance (Wales) Bill, introducing significant changes to local taxation to create a more equitable and adaptable system reflecting current economic conditions.

In an Official Statement from Rebecca Evans, Cabinet Secretary for Finance, Constitution and Cabinet Office,  emphasized the importance of these reforms as the first local government finance bill since devolution. She highlighted that the changes address long-standing limitations and are designed to create a consistent, effective, and adaptable taxation framework for modern Wales.
For further details, visit the official announcement: 
Senedd passes Bill to reform local tax system in Wales | GOV.WALES




Background on Business Rates in Wales:Non-Domestic Rates (NDR), or business rates, are taxes levied on most non-domestic properties to fund local services. More information can be found here: Business Rates in Wales | Business Wales

Key Reforms for Non-Domestic Rates (Business Rates):

• Frequent Revaluations: Property values will be updated every three years.
• Increased Flexibility: The Bill allows for more flexible adjustments to reliefs and exemptions.
• Payment Calculations: It provides the ability to modify payment calculations for different ratepayer categories.
• Tax Avoidance: Measures to close known avoidance arrangements and enhance responsiveness to future avoidance.
• Information Improvements: Enhancements to the data provided by ratepayers.

Key Reforms for Council Tax:

• Five-Year Revaluation Cycle: Property revaluations will occur every five years starting April 2028, with provisions for the Welsh Ministers to adjust this cycle if needed.
• Tax Band Flexibility: Future potential redesigns of the tax system will be supported by flexible organization and labelling of tax bands.
• Council Tax Reduction Scheme: Continuation of the national scheme offering financial support to low-income households.
• Discounts and Exemptions: Greater flexibility to modify discounts and exemptions for certain groups.

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