The Non-Domestic Rating (Transitional Period) (Appropriate Fraction) Order 1989

Explanatory Note

(This note is not part of the Order)

The Local Government Finance Act 1988 introduces with effect from 1st April 1990 a new business rate, which replaces the general rate insofar as concerns business property. Schedule 7A to the Act provides for the phasing of the gains or losses occasioned by this and by the revaluation of business property for 1990. When the conditions set out in the Schedule are satisfied, the gains and losses are phased over a period of up to 5 years. The taper of the phasing depends upon the “appropriate fraction” which is applied annually to the base liability.

For hereditaments whose bills are increased by the introduction of the new rate, the appropriate fraction is calculated in accordance with rules set out in the Schedule. This Order sets out the rules for the calculation of the appropriate fraction for the transitional years beginning in 1990 and 1991 for those whose bills are reduced on the introduction of the rate. As required under the Schedule, the rules are designed to secure so far as practicable that, taking both classes of case together, the total amount payable by way of non-domestic rates for a transitional year is the same as it would be apart from the transitional provisions.