Take Aways from the October 2024 Budget

  1. The Government announced a reduction for 2025/26 of the 2024/25 level of rates relief granted to Retail, Hospitality and Leisure (RHL) properties from 75% to 40% in England, with the relief cap per business or group remaining at the current £110,000. This will affect small businesses with low numbers of qualifying properties who will see their relief almost halved in many cases. Mid-size and large companies will simply spread the same capped relief across more properties. Relief in Wales is already fixed at 40%, with conditions, for 2024/25.
  2. There is also a commitment to introduce a long-term reduction in the multiplier for RHL properties, but this will be funded by a higher multiplier for Rateable Values (RVs) above £500,000. A lower “poundage” will apply below £500k RV with a further discounted one for small properties below £51k RV. This change will begin with the 2026 Revaluation, leaving RHL businesses in a state of flux and uncertainty in 2025/26.
  3. The above-£500k RV supplement will be applied to all categories of property, not only RHL properties.
  4. The small business multiplier is frozen for 2025/26 at 49.9p in the £, but CPI will be applied to the standard multiplier, which becomes 55.5p in the £. “Local” multiplier provisions will drive this multiplier even higher, with the Crossrail supplement providing for 57.5p and the City of London Corporation at 59.3p – this last one providing for Rates levels at almost 60% of rental values. Local BIDs may add to overall burden in some locations.
  5. Check will be retained as part of CCA Check Challenge Appeal with the Duty to Notify (DTN) process beginning in 2026 but with full implementation deferred to the 2029 Revaluation.
  6. The Government will consult on other potential areas of business rates reform, reintroducing the concept of preventing avoidance and evasion of Rates (particularly on Empty Properties via currently lawful mitigation schemes), together with a further discussion on reducing the duration of Revaluation cycles and the gap in time between the Antecedent Valuation Date (AVD) and Compiled List Day.
  7. As previously telegraphed, charitable relief currently at a mandatory 80% will be removed from private schools from April 2025, increasing their liabilities to 5x their current level.

In summary the above changes will raise an additional £1bn in 2025/26 just from the fully confirmed changes. Clearly the era of reducing Rates burden on business (which was always patchy and not well targeted, to be fair) is now firmly over as we enter a period of rising liabilities.