Earlier today the Chancellor announced a series of measures said to be worth £13.6bn to help ratepayers from 1 April 2023, the same date the next revaluation comes into effect.
The key aspects of this announcement and our views on each are summarised below:
- Business rates multiplier frozen – On the face of it this is good news as the Government can increase the multiplier each year by the rate of inflation. This, however, may not be as generous as it seems as the outcome of the 2023 revaluation may well have resulted in the multiplier decreasing below its current level.
- Extended and increased business rates relief for retail, hospitality and leisure properties – This is good news for businesses in these sectors, especially as we head into recession, but the cap of £110,000 means it will have little impact for larger businesses.
- Reforming transitional relief – Scrapping downward transition i.e. the annual caps on the reduction in business rates resulting from revaluations, will be the most welcome of all the measures announced today. This means businesses whose rateable value will decrease next April will benefit from the full impact of the reduction. This will bring welcome relief to retailers who are likely to see falls in value at the 2023 revaluation. There will also be caps on large increases in liability, but these go up to 30% so certain properties, particularly in the industrial sector, will see big increases.
- Decision on an Online Sales Tax – The decision not to introduce such a tax, will be disappointing for most retailers who were hoping that this would help to level the playing field between bricks and mortar and online retailers.
Although these measures will be broadly welcomed, this will not be the case for all businesses. The Government also confirmed today that as a result of the 2023 revaluation the retail sector will see a decrease in rates liability next April of 20%, but that large distribution warehouses are likely to see an increase of 27%. Many businesses operating in the industrial sector will therefore have to contend with big increases in rates at the same time as increased rents, utility bills and interest rates.
The impact of the 2023 revaluation will be unique for each individual property. For more information, contact via email: email@example.com or on 07712 937 448.
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