In October 2024, following the Autumn Budget, draft legislation was published proposing changes to England’s rating system, namely the introduction of lower multipliers for qualifying retail, hospitality, and leisure properties, as well as new powers for the Treasury to set higher rates for properties valued at £500,000 or more.
For now, the budget has confirmed that the Retail, Hospitality and Leisure Business Rates Relief Scheme (RHLR) will provide eligible occupied hereditaments with 40% relief (reduced from the current rate of 75%), up to a cash cap of £110,00 per business. The extension is set to be worth over £1.5billion in 2025/26, with billing authorities being fully reimbursed by the government.
However, with the extension to relief only guaranteed for one more year, further changes are set to come into effect in 2026/27, in line with the next revaluation. As we follow the progress of the bill, here are the key elements you need to know.
The proposed legislation grants the Treasury authority to introduce up to two reduced tax rates for retail, hospitality, and leisure properties. These lower rates may offer discounts of up to 20 pence per pound compared to the small business rate and will be funded by imposing a higher tax rate, limited to a maximum of 10 pence per pound above the standard rate. However, these higher rates would be restricted to properties with a rateable value of £500,000 or more, most likely to affect large industrial properties.
Although exact values of the multipliers will likely partly depend on the results of the next revaluation, which takes effect in 2026, the government has stated its intention to offset the reduced rates with the additional revenue from higher multipliers. This is to ensure that overall business rates revenue across England remains unchanged.
The Bill also proposes the removal of charitable business rates relief for private schools registered as charities, set to come into effect from April 2025. However, key information about which institutions will be affected is yet to be published.
The Non-Domestic Rating (Multipliers and Private Schools) Bill currently sits at the ‘committee stage’ in the House of Lords. As we follow the progress of the Bill, our Insight Assist team will continue to strive to bring you updates and alerts as they happen.
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