Business rates: Government launches another consultation

The UK Government has launched another consultation into reform of business rates. 

The first phase of the consultation will run until Christmas.

Chancellor Rachel Reeves told the House of Commons that the government had an intention to introduce permanently lower multipliers for retail, hospitality and leisure properties with a rateable value under £500,000 from April 2026-2027 but this would be funded by a higher multiplier on all properties with rateable values of £500,000 and above. 

The discussion paper says priorities include data transparency, shortening periods between revaluations andimprovement relief.

For 2025-2026, the Small Business Multiplier will be frozen and relief will be extended for eligible retail, hospitality and leisure properties but reduced from 75% to 40%, subject to the total cash cap of £110,000 per business.

‘Improvements to the business rates system will not come until 2026. We welcome the recognition that retail, along with hospitality businesses, should pay lower rates. But with the detail still to be worked through, it is unclear whether this will address an imbalance which sees retail, as 5% of the economy, pay 21% of the total business rates bill. In order to stimulate investment, it is vital these changes reduce the overall costs on the industry, rather than simply shifting the burden from one part to another,’ says Helen Dickinson, BRC chief executive.

‘While retailers welcome future action on rates, they are assessing the impact of today’s announcement. There remains many unanswered questions about the new charges and discounts that will be levied from 2026. Charging more to businesses with higher rateable values may punish not only distribution hubs, but also larger stores, which play a key role in attracting footfall to high streets and town centres.

‘With retailers paying over 21% of all business rates in the economy, the solution is not to simply shift the burden around the industry, but to look outside retail. Without action to address the disproportionate impact of business rates on retail, the Government’s plan is simply robbing Peter to pay Paul.’

Image: Carlos Delgado, CC BY-SA 3.0

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