The UK government’s autumn budget of 2022 included a freeze on business rates as part of an overall business support package. This meant that the multipliers were frozen at 51.2p (standard multiplier) and 49.9p (small business multiplier). However, it is expected that the multipliers will rise in April 2024 due to estimated inflation of 6% in September 2023, which could add around £1.5 billion to business rates.
Anthony Hughes of RVA Surveyors said: “It was frustrating when they froze the multipliers. Typically at the beginning of a rating list, they are lowered. Now business rates payers are facing a potential further 6% increase being shoehorned in. And at the same time as Retail Hospitality and Leisure [RHL] is set to end as well, which will be a shock for many in receipt of it.”
The rise in business rates could be detrimental to many sectors in the UK, particularly Retail Hospitality and Leisure, which is due to end on the 31st of March 2024. If a property’s rateable value is £30,000, the rates payable is £14,970. With RHL applied, the property owner is currently only paying £3,742.50. Unless an alternative is put in place or RHL is extended, businesses will have to pay the full amount, as well as an inflation-linked increase expected in April 2024.
The increase in business rates could have a serious impact on commercial property owners, as they are already facing a rise in other costs, such as insurance and wages. Transitional Relief may be available, which limits how much a rates bill can change each rating list. This could be the deciding factor for many businesses struggling to keep their doors open.
Derick is an experienced reporter having held multiple senior roles for large publishers across Europe. Specialist subjects include small business and financial emerging markets.