Business rates: transitional relief but no cut to multipliers

Jeremy Hunt has introduced a transitional business rates relief scheme but failed to cut the multipliers.

Some £13.6m will be spent over the next five years as the retail, hospitality and leisure sectors transition to new bills. However, the next revaluation of rates will go ahead in April 2023, which the chancellor warned could result in increasing costs due to inflation.

The business rates multipliers will be frozen from 2023/24 at 49.9p and 51.2p and increases caused by the increase in rateable value at the valuation will be limited to 5%, 15% and 30% depending on the size of the property.

‘The Government has taken an essential step towards longer term reform of the broken business rates system by announcing the scrapping of downwards phasing of transitional relief. This decision means that April’s bills reflect market conditions and retailers will pay only what they owe, rather than being forced to overpay their rates bill when the value of their property has already fallen. This represents the first step towards a more fundamental reform of the broken business rates system,’ says Helen Dickinson, British Retail Consortium chief executive.

‘Whilst the prospect of support for retail businesses coming next year will be welcomed, the UK is in recession now and many retailers will be focused on surviving the next few months as consumer confidence and spending declines, and costs continue to rise. The question remains, will the support offered from April next year be too little too late for some struggling retailers,’ says Paul Martin, KPMG UK head of retail. 

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