The Chancellor is set to introduce a business rates support package worth £4.3 billion over the next 5 years which is designed to support small businesses and the high street. These measures include freezing the small business multiplier at 49.9p for another year, though this will only affect properties with a rateable value of less that £51,000.
The vast majority of properties in England which have a rateable value in excess of £51,000 will see their rates bills increase by 6.7% next year as the large property multiplier will increase from 51.2p to 54.6p in-line with the Consumer Princes Index (CPI). The failure to freeze the larger multiplier will therefore lead to significant business rates rises for the majority of the UK’s larger retailers and businesses from April 2024. Other tax rates, such as income tax or VAT do not increase by inflation each year, so why should business rates be any different?
In his speech the Chancellor also confirmed that the Retail, Hospitality and Leisure Relief scheme will be extended for the 2024/25 Rate Year. This will mean that qualifying businesses will receive a 75% discount on their rates bills. However, this relief will once again be capped at £110,000 per business, which means that the occupiers of more than one property will only witness a limited benefit.
The extension of the Retail, Hospitality and Leisure Relief scheme, whilst it is to be welcomed by those who will benefit from it, is really a sign of the fundamental flaws that exist in the business rates system which have not been addressed by successive Chancellors.
Overall, the Chancellors business rates support package is likely to do little to alleviate those businesses who are continuing to struggle in the current economic climate and will not encourage them to invest and contribute to the government’s aim of growing the economy. For this to happen, a more fundamental reform of the current business rates system is necessary.