Rating Update – Welsh Budget 2025/26 UBRs and Reliefs
The Welsh Government has published the Draft Welsh Budget for 2025/26. The budget included significant updates to business rates for 2025/26, notably capping the increase to the non-domestic rates multiplier, although not going as far as freezing it. While the Retail, Hospitality, and Leisure Relief scheme continues to provide support, it concludes at the end of the next rate year. Additional measures include the permanent relief of childcare premises.
2025/26 Uniform Business Rate (UBR)
The increase to the non-domestic rates multiplier for 2025/26 has been capped at 1%. This is lower than the 1.7% increase which would otherwise apply from the default inflation of the multiplier in line with Consumer Price Index (CPI). The multiplier (subject to approval) for 2025/26 will therefore be 56.8p.
Reliefs
Retail Leisure and Hospitality Relief
In line with the announcement in Westminster’s Autumn Budget, the Welsh Government has confirmed the Retail Leisure and Hospitality Relief scheme will provide eligible ratepayers a 40% business rates relief for 2025/26, subject to a cap of £110,000 per business. The cap will inevitably mean that occupiers of more than a small number of properties will still only see a limited benefit and the relief will continue to be subject to Subsidy Control Measures. Under the Minimum Financial Assistance limits a recipient may not receive relief which qualifies as Subsidy to greater than £315,000 over a rolling three-year period including the year to which the relief applies.
In his statement, the Welsh Finance Minister announced this would be the sixth and final year that the relief scheme would be applied but did not mention any replacement support to the retail and hospitality sectors.
All other reliefs
The 100% relief for registered childcare premises has been made permanent.
Observations
While it is positive that the Welsh Government did not increase the non-domestic rates multiplier in line with inflation, it is disappointing that it did not choose to freeze it in line with the small multiplier in both England and Scotland, particularly as there will be no transitional relief for businesses for 2025/26.
The Local Government Finance (Wales) Act 2024, which received Royal Assent on 16 September 2024, provides the legislative basis required for non-domestic rates reform in Wales. The Welsh Government have said that its focus remains on delivering a rates system which is ‘demonstrably better for Wales’ and has reaffirmed its intention to seek alternative approaches to non-domestic rates for the longer term.
We will closely monitor any developments and provide you with relevant updates and advice.
Contact us
Please do not hesitate to contact us if you have any queries. We are here to discuss any specific issues regarding your properties and will keep you informed of further news on business rates.
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