Explanatory note

Regulation 2 of the Non-Domestic Rating (Miscellaneous Provisions) (No. 2) Regulations 1989 (S.I. 1989/2303) makes provision in relation to valuation of non-domestic property by reference to the notional cost of constructing or providing a hereditament (“the contractor’s basis”) which is applied where there is no more direct evidence of rental value. Regulation 2 of S.I. 1989/2303 specifies the annual percentage rate to be applied in relation to the notional cost of construction.

These Regulations amend that regulation in relation to England in respect of hereditaments shown in a rating list compiled for a billing authority in England on or after 1st April 2017. They provide for the annual percentage to be 2.6% in the case of certain defence, educational and healthcare hereditaments and 4.4% in other cases.

An impact assessment has not been produced for this instrument because it amends an existing local tax regime. Publication of a full impact assessment is not necessary for such legislation.