# The Non-Domestic Rating (Artificial Avoidance Arrangements) (Local Lists) (Wales) Regulations 2026, Note: Explanatory note


(This note is not part of the Regulations)
Sections 63F to 63M of the Local Government Finance Act 1988 (“the Act”), which were inserted by section 13 of the Local Government Finance (Wales) Act 2024, make provision about counteracting advantages arising from artificial arrangements for the avoidance of non-domestic rates liability in relation to hereditaments in Wales.
These Regulations describe the types of avoidance arrangements, in relation to hereditaments on the local non-domestic rating lists, which are artificial for the purposes of sections 63F to 63I and 63K to 63M of the Act (unless a billing authority determines otherwise). They also make provision in relation to penalties and consequential amendments to secondary legislation.
The types of arrangements which are artificial are described in regulation 3 of, and the Schedule to, these Regulations. These are: arrangements where a hereditament is not occupied on a commercial basis, where the ratepayer has been wound up voluntarily, where the owner or occupier exhibits particular characteristics and behaviours, or where the occupation of the hereditament has certain characteristics. However, regulation 3(2) enables a billing authority to determine that an arrangement of a type specified in the Schedule is not artificial after having regard to all the circumstances. Such circumstances may include (but are not limited to) those listed in regulation 3(3).
Regulation 4 makes provision in relation to the penalty imposed where a person has failed to pay an amount due to a billing authority in consequence of having made an artificial arrangement and the information which must be contained in notices imposing such penalties (“penalty notices”).
Regulation 5 makes provision as to how a billing authority may effect service of notices given under section 63K(1) of the Act (“section 63K notices”) and penalty notices.
Regulation 6 amends the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 (“the 1989 Regulations”), which govern the billing, collection and recovery of unpaid non-domestic rates. These amendments ensure that the 1989 Regulations will apply to an amount payable by a ratepayer as a result of the billing authority applying sections 63F to 63I and 63K to 63L of the Act and these Regulations. The amendments also provide that where a section 63K notice has been served on that ratepayer, a demand notice in respect of the amount payable will not be served until after the deadlines for reviewing and appealing the section 63K notice have expired.
Regulation 7 amends the Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023 to ensure that relevant provisions of those Regulations apply in relation to appeals brought against section 63K notices.
The Welsh Ministers’ Code of Practice on the carrying out of Regulatory Impact Assessments was considered in relation to these Regulations. As a result, a regulatory impact assessment has been prepared as to the likely costs and benefits of complying with these Regulations. A copy can be obtained from the Non-Domestic Rates Policy and Reform Division, Welsh Government, Cathays Park, Cardiff, CF10 3NQ.

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Source: https://www.legislation.gov.uk/wsi/2026/43/note (the official version)
Page: https://openlegislation.uk/non-domestic-rating-artificial-avoidance-arrangements-local-lists-wales-regulations-2026/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.