Business Rates in the Budget

The Chancellor announced that:
- Small Business Rates multiplier is fixed again (relevant to properties with an RV below 51,000)
- Retail Rates relief is reduced from 75% to 40% from 1 April 2025
- An unquantified “permanent reduction” for retail hospitality and leisure properties from 2026.

The Chancellor did not announce (but the HMRC now has): ominous references to “further improvements over this Parliament”.

There are hints that lower retail rates will be funded by an increase in the multiplier for (possibly all) properties with a Rateable Value over £500,000 – so there will be an incentive to split larger assessments and to fight hard to keep RVs below that threshold in the 2026 List.

There is also talk of “encouraging investment” which may mean some kind of extension to the policy of ignoring improvements for the first 12 months. The Government will also examine whether empty property relief encourages investment. That is an indicator that an attack of some kind on EPR is imminent. As is the specified focus on “creating a farer system” by “tackling avoidance and evasion”.

Some of the proposed changes to the appeal system due to take effect in 2026 have now been delayed till 2029. E.g. the “Check” stage of correcting an assessment will not be abolished till 2029, which probably removes some of the panic anticipated around the start of the 2026 List. The new liability on ratepayers to volunteer information or suffer penalty will “begin rollout” in 2026, but what was supposed to be the prid pro quo: access to VOA valuation evidence data, will not be available. It has been initially delayed to the election year of 2029...

And lastly: we are all invited to the party! If you want to have a voice in the discussion please contact transformingbusinessrates@hmtreasury.gov.uk by 15 November 2024.

Conclusions:

- Small retailers – your landlords will no doubt want to share your good fortune by increasing your rent.

- Owners of empty property – standby for increased void costs, but we’ll let you know what you can do in due course.

- Occupiers negotiating a new rent of c. £500k – fight like crazy to keep it below that threshold.

For clarification or advice on Business Rates contact our specialists: John Banbury and Robert Sherwill