- The business rates system has been a subject of a long-running review, started by the previous government. The below applies to England only.
- At the Autumn Budget 2024, the government announced its intention to create, over the current parliament, “a fairer business rates system that protects the high-street, supports investment, and is fit for the 21st century”. A consultation on transforming business has been launched setting out the government’s long-term priorities for reform as well as some immediate actions.
- As the first step of the reform, the Retail, Hospitality and Leisure Relief (RHLR) has been extended for a further year from April 2025, albeit at a reduced discount rate of 40% rather than the current 75%. From April 2026, the government will move to a permanently lower multiplier for RHL businesses with rateable values of below £500,000, funded by an increased multiplier for properties with rateable values of £500,000 and above. Additionally, the small business rates multiplier will be frozen and the standard multiplier will be increased by inflation to 0.555 for the 2025-26 rate year.
- In the long-term, the priority areas for further reform include incentivising investment and growth; in particular, feedback is sought on the efficacy of certain reliefs. The government intends to publish a consultation on adopting a “General Anti Avoidance Rule” for business rates in England. It has also confirmed its intention to proceed with delivery of the Digitalising Business Rates project by 2028, to be enabled by 2029 with a duty on ratepayers to provide information on their properties.
- Separately, the government will remove the business rates charitable relief for private schools in England from April 2025. The relief currently provides an 80% discount on the rates they pay on their premises.
- Timing: the consultation closes in March 2025. The business rates charitable relief for private schools is removed from April 2025.
Resources (click to open)
- Transforming Business Rates (HM Treasury, October 2024)
