National Non-Domestic Rates (NNDR) for Academies: What You Need to Know for 2026/27
- Feb 12
- 3 min read
Business rates, officially known as National Non-Domestic Rates (NNDR), are a tax charged on non-domestic property in the UK, including school buildings. For academy trusts, understanding how NNDR is funded and paid is crucial as we move into the 2026/27 financial year.
Recent updates from the Department for Education (DfE) provide greater clarity on how these arrangements will work from April 2026, and what academies need to do to ensure they remain compliant and correctly funded.
What Are NNDR and Mandatory Relief?
Academies are entitled to significant business rates relief, with 80% of their NNDR liability covered by mandatory rates relief. The remaining 20% is funded centrally by the Department for Education, rather than by the academy itself.
This means that eligible academies typically contribute little to their NNDR cost, but understanding how the funding mechanics work remains important for budgeting and financial planning.
How Funding Is Administered in 2026/27
The updated guidance confirms that academies will need to check how their billing authority is handling the payment process for 2026/27. There are two primary ways this can work:
1. Central Payment ProcessIf the billing authority has opted into the DfE’s central payment process:
The academy does not pay the NNDR bill directly to the billing authority
The billing authority may still issue a rates invoice, but this is for information only
The DfE will indicate the notional NNDR amount and associated relief via remittance advice, which academies must record for accounting purposes
2. Existing Payment Process
If the billing authority has not opted into the central process:
The academy will pay the NNDR bill directly
It will then need to submit a claim to the DfE for reimbursement of the 20% funded amount
The method that applies to your academy depends on your billing authority, so it is important to review the published guidance and confirm which payment route applies for 2026/27.
Check Your Property Eligibility
Not all property elements automatically qualify for NNDR funding. Exclusions typically include:
Vacant properties
Facilities that are rented out or used separately from the main school site
Buildings used solely for administration purposes
Any NNDR incurred before conversion to academy status
Academies should review their property arrangements carefully to ensure that only eligible liabilities are included in any claims or remittances.
Why This Matters for Academy Trusts
Understanding your NNDR payment process and relief entitlements ensures that:
Your accounts correctly reflect funding and liability
You avoid under- or over-estimating your financial commitments
You are prepared for audits or accounting reviews
Incorrect treatment of rates or improper claims could affect your financial statements or local authority funding allocations, so confirming the correct process is a key governance step.
What You Should Do Next
Check which NNDR payment process applies to your academy for 2026/27 by reviewing the confirmation spreadsheet published by your billing authority or the DfE.
Ensure your internal accounting reflects whether NNDR is paid centrally or through direct billing.
Review your property portfolio to confirm that only eligible sites are included for relief funding.
Seek advice if you are unsure about your property classification or billing authority arrangements.
How SJC Can Help
If your academy trust needs support navigating business rates entitlements and payment processes, we can assist with:
Understanding how the central payment process affects your finances
Ensuring your accounts and claims are correctly prepared
Reviewing property eligibility and relief entitlements
Helping you liaise with billing authorities or the DfE where needed
Get in touch with SJC for tailored guidance to ensure your trust stays compliant and optimised for funding as the new financial year begins.
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