- 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 previous 75%. From April 2026, the government will move to a permanently lower business rates 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.
- The government intends to target further stakeholder engagement to develop specific reform options ahead of the 2025 Budget. They plan to announce reforms during the Budget, along with multipliers for 2026-27 and details of the transitional relief scheme.
- 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.
- Timing: the consultation closed in March 2025. The draft 2026 Rating List will be published during Q3-Q4 2025.
Resources (click to open)
- Business rates: forward look (HM Treasury, February 2025)
- Transforming Business Rates (HM Treasury, October 2024)
