With days before the start of the new rate year, the Chancellor delivered her Spring Statement which, unsurprisingly, was silent on business rates. As businesses prepare for new rate bills, there has been no last-minute reprieve from the significant increases taking effect for some in the retail, hospitality and leisure sectors as of 1 April. In this update, we provide an overview of key business rates policies and changes.
Spring Statement
In the published Spring Statement document which followed yesterday’s speech the Government reconfirmed its commitment, to ‘support the high street and boost investment’ and has promised an interim report in the summer following the Transforming Business Rates consultation paper.
Transforming Business Rates
In November, we provided a detailed review of and reflection on the Government’s discussion paper in our report Transforming Business Rates or Tinkering at the Margins. Final written representations to the discussion paper can be made up to 31 March 2025. As part of their ‘stakeholder engagement’, outlined in the paper, the team from HM Treasury held a number of round table meetings where ratepayers and their representatives were able to discuss some aspects of the paper. Reflecting on these and the paper itself, we have submitted our own response and have also been adding to the responses of various trade organisations and the professional bodies.
If any stakeholders want to submit their own comments, there are still a few days to do so. For more information visit Transforming Business Rates on the Government’s website.
General Anti-Avoidance Rule
Before the election, the previous government had indicated that they would be issuing a new consultation on a General Anti-Avoidance Rule which followed on from the changes to the empty rate rules in 2024. In her statement, the Chancellor reiterated her intention to crack down on tax avoidance as announced in the Autumn Budget. Although there was no specific mention of business rates avoidance in the statement, we anticipate that this issue has not gone away and that a consultation is imminent.
Non-Domestic Rating (Multipliers and Private Schools) Bill
Following the Autumn Budget, the discussion paper on transforming business rates and the Labour Party’s manifesto pledges relating to business rates reform and private schools, the Government introduced the Non-Domestic Rating (Multipliers and Private Schools) Bill in November last year which we detailed in our November 2024 update.
We have been monitoring the progress of this Bill through Parliament and working with the professional bodies to identify our concerns — particularly on the Multipliers clauses which legislate for the introduction of lower multipliers for certain retail, hospitality and leisure (RHL) properties and a higher multiplier for properties with a rateable value of £500,000 or more.
The Bill was subject to considerable scrutiny in the House of Lords with several amendments tabled specifically to remove manufacturing, RHL and healthcare properties from the effects of the higher multiplier and more controversially to stop the removal of charitable rates relief from private schools. Peers in the House of Lords criticised the Bill and voted through a number of amendments, but the Government has rejected these using a rarely used ‘financial privilege’ mechanism which allows the Commons to overrule the Lords. Although the parliamentary process is still ongoing, we anticipate that the Bill will attain Royal Assent imminently. This will allow Local Authorities to collect full rates from private schools for the April 2025/26 rate year and put in place the legislation to provide for the lower and higher multipliers.
We will continue to push for more clarity on the multipliers. However, no further details are likely to emerge until the Autumn Budget by which time the Valuation Office Agency will have delivered the draft 2026 Rating Revaluation assessments and the Government modelled its effect. Until then, there remains significant uncertainty.
2025/26 Rate Demands
In advance of 1 April 2025, local authorities across the UK have been issuing rate demands for 2025/26. These reflect the revised multipliers announced at the end of last year.
A significant change in England is the reduced discount available under the Retail, Hospitality and Leisure Relief scheme for 2025/26, decreasing the discount from 75% to 40%, but maintaining caps and subsidy controls.
A summary of the multipliers and key reliefs for 2025/26 is detailed in the table below. For a fuller list of reliefs, exemptions and supplements, please visit our data card:
2026 Revaluation
As we move into the 2025/26 rate year the 2026 Revaluation is fast approaching. Properties in England and Wales will be revalued based on market levels at 1 April 2024 (the Antecedent Valuation Date) while in Scotland the valuation date is 1 April 2025. If you have commercial property in Scotland, read our latest Scotland update.
We have carried out our own impact exercise on the effects of the revaluation across all property sectors and can provide estimated rate liabilities for your properties for the period from 1 April 2026. Please speak to your usual Newmark contact for more details.
In the meantime, we are here to assist with any property-related inquiries and keep you informed on business rates developments across the UK.
