At the Autumn Budget, the Chancellor announced a package of measures to reform business rates and support the high street. Here are the details and an opportunity to have your say on the Transforming Business Rates paper.
For 2025/26
For 2025/26 the Chancellor announced a package worth over £1.6 billion:
- The small business multiplier will be frozen at 49.9p.
- The standard multiplier will be uprated in April in line with September’s CPI figure (1.6%), increasing the multiplier from 54.6p to 55.5p.
- The Retail, Hospitality and Leisure (RHL) relief scheme will be extended for one year for 2025/26, retaining the existing eligibility criteria but reducing the level of relief to 40%, up to a cap of £110,000 per business.
- From April 2025, charitable rate relief will no longer be applicable to private schools.
Local authorities will be expected to use their discretionary relief powers (under section 47 of the Local Government Finance Act 1988) to grant Retail, Hospitality and Leisure relief in line with the relevant eligibility criteria. Authorities will be compensated for the cost of granting these reliefs via a section 31 grant from the government. No new legislation will be required to deliver this scheme.
The Department will shortly publish updated guidance for local authorities for the 2025-26 Retail, Hospitality and Leisure scheme.
The Department introduced primary legislation on the 13 November to amend the Local Government Finance Act 1988 to end charity rate relief eligibility for private schools. This change is intended to take effect from April 2025, subject to Parliamentary process. Private schools which are ‘wholly or mainly’ concerned with providing full time education to pupils with an Education, Health and Care Plan will remain eligible for relief.
The Department expects local authorities to ensure that their systems are updated, including the implementation of any necessary software changes related to the change in the value of RHL relief, and that bills issued for the 2025/26 tax year reflect the changes announced at the Autumn Statement, including identifying those school properties affected by the removal of charity rate relief ahead of annual billing in 2025/26.
For 2026/27
The Chancellor also announced that, in order to create a fairer business rates system and level the playing field for the high street, the government intends to introduce two permanently lower tax rates for retail, hospitality, and leisure (RHL) properties with rateable values below £500,000 from 2026/27.
The government intends to sustainably fund this by, from 2026/27, applying a higher multiplier to all properties with a rateable value of £500,000 or above.
in line with the announcement at the Budget, the government introduced legislation on 13 November, enabling the implementation of these additional multipliers, . Further information on the legislation, including the Bill’s Explanatory Notes can be found at: Non-Domestic Rating (Multipliers and Private Schools) Bill
‘Transforming Business Rates’ Discussion Paper
Alongside the Budget, a business rates discussion paper, ‘Transforming Business Rates’ has been published, setting out the government’s priority areas for further reforms, and inviting industry, local government and other interested parties to help co-design a fairer business rates system.
The paper explains that the government will be conducting engagement between November 2024 and March 2025 and invites anyone interested in being involved to contact .
The government has also invited written representations and asked for these to be submitted as soon as possible, and no later than March 2025; and has asked respondents to indicate the organisation they are representing (if applicable).
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