The government has provided a “major shot in the arm for the high street” with the business rate support measures outlined in the Autumn Statement, according to Colliers.
From 1 April 2023, business rate bills in England will be updated to reflect changes in property values since the last revaluation in 2017. On Thursday, chancellor Jeremy Hunt announced a package of targeted support worth £13.6bn over the next five years to help businesses as they transition to their new bills.
Business rate multipliers will be frozen in 2023-24 at 49.9p (for small businesses) and 51.2p, preventing them from increasing to 52.9p and 54.2p.
In addition, an upward transitional relief capping scheme will provide support to ratepayers facing large bill increases following revaluation. This £1.6bn of support will be funded by the exchequer rather than by limiting bill decreases, as was the case for previous revaluations. The ‘upward caps’ will be 5%, 15% and 30% for small, medium, and large properties respectively in 2023-24, and will be applied before any other reliefs or supplements.
Also, there will be no downward transitional surcharge for businesses whose rateable value decreases following revaluation. Instead, ratepayers will see reductions to their rate bills immediately.
According to Colliers, which has been campaigning against downwards transition, this is a major boost for the retail sector. Colliers had estimated that, if implemented, downward transition would have cost the sector an extra £2.7bn more in their rates bills during the three years of the list than they should have paid.
“It is with massive relief that the government has finally listened to us and other industry bodies about out-of-control business rates rises following the next revaluation,” said John Webber, head of business rates at Colliers. “By removing any downward transition, the government has finally recognised that the business rates system cannot be revenue neutral without causing significant hardship.
“Freezing the multiplier is a big positive, as is capping rates rises,” Webber added. “Businesses now will be able to sensibly plan ahead for 2023.”
Chris Grose, rating director at Hartnell Taylor Cook, also welcomed the removal of the transitional surcharge where rate payments fall following revaluation, commenting: “This is great news for these affected businesses, especially after a difficult two years for hospitality, leisure and retail, in particular.”
However, Grose said other elements of the support package were “less positive”, insisting that there is “still a large burden on those whose rates are increasing”.
He added: “If the government wants to effectively support all businesses through the recession, more will still need to be done to reduce the burden of business rates.”
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