Rating Update - Autumn Budget 2024

In this update:

• 2025/26 Multipliers for properties in England
• Revised Retail, Hospitality and Leisure Relief Scheme for 2025/26
• Charitable Relief for Private Schools to be removed
• More Consultation on Business Rates

2025/26 UBR Multipliers for properties in England

In line with the previous Government, the Chancellor’s focus has again been on supporting small businesses. The announcement that the small multiplier would be frozen again at 49.9p for the 2025/26 rate year will be good news for businesses in England with properties with a Rateable Value (RV) below £51,000.

For those businesses subject to the large multiplier this will increase by 1.7% in line with inflation, from 54.6p to 55.5p.

The change means another annual increase for some 220,000 properties with assessments of RV £51,000 or more. Collectively, these properties contribute more than 75% of total rates revenues, and will once again shoulder the burden of next year’s business rates changes.

These changes apply in England only. The budgets for Wales and Scotland are due in December. It will be interesting to see if the Welsh and Scottish governments choose to freeze or adjust their UBR figures in line with England’s.

Revised Retail, Hospitality and Leisure Relief Scheme for 2025/26

The Chancellor has reconfirmed the Government’s commitment to the high street and announced plans to introduce permanently lower multipliers for high street retail, hospitality and leisure properties from 2026/27. In the interim, she confirmed that the RHL Relief scheme will continue in England for the 2025/26 rate year but at a substantially reduced discount of 40% compared with 75% this year. Unfortunately, the cash benefit will continue to be capped at £110,000 per business, which means that occupiers of more than a small number of properties will still only see a limited benefit.

We anticipate that the RHL scheme for 2025/26 will continue to be subject to the Minimal Financial Assistance limits under the Subsidy Control Act. This means that no recipient can receive more than £315,000 over three years (consisting of the current financial year and the two previous financial years).

Charitable Relief for Private Schools to be removed

The Government has also confirmed its intention to remove charitable rate relief from most private schools from 1 April 2025, although those private schools that are “wholly or mainly” concerned with providing full-time education to pupils with an Education, Health and Care Plan will remain eligible. We anticipate that a Bill will be published very soon to facilitate this change.

More Consultation on Business Rates

The Government has today issued a discussion paper headed “Transforming Business Rates” which sets out its aims to create a “fairer business rates system that protects high streets, supports investment, and is fit for the 21st Century.”

The paper outlines the measures announced in the Budget in more detail and provides an update on the timing of the reforms included in the Non-Domestic Rating Act 2023.

The Government have also taken the opportunity to publish responses to the consultation on transparency and disclosure conducted last summer.

We are working through the detail of these documents and will update you further shortly. However, it is already clear that the Government will neither abolish business rates as adopted as Labour policy three years ago, nor replace them. Business rates are here to stay, but there will be ongoing amendments and modernisation, alongside adjustments as to where liabilities fall.

In the meantime we are, as always, here to discuss any specific issues regarding your properties, and we will continue to keep you informed of further developments regarding business rates across the UK.