Summary

On 17 November 2022 the Chancellor presented the Autumn Statement, which revealed a package of support to help with business rates worth a projected £13.6 billion over the next 5 years. The key points, in relation to business rates, are as follows:

  • Business rates will be revalued from 1 April 2023 as planned

  • Business rates multipliers will be frozen in 2023-2024

  • Downward transition caps are to be abolished

  • Upward transitional relief caps are to be applied

  • Sector specific support to be extended to 75%

  • Certain small business bills capped at £600 a year

  • New improvement relief to be introduced from April 2024

  • No online sales tax

2023 Revaluation

The 2023 business rates revaluation will go ahead with business rates bills updated from 1 April 2023 to reflect changes in property values since 2017. Ratepayers can see the future rateable value for their property and get an estimate of what their business rates bill may be following the revaluation using this link (Find a business rates valuation - GOV.UK (www.gov.uk)).

Multiplier Freeze

Business rates bills for properties are calculated by multiplying the rateable value of a property by either the small business multiplier or the standard multiplier and subtracting any relevant reliefs.

For 2023-4, these multipliers will be frozen at 49.9 pence (for small businesses) and 51.2 pence (for standard businesses) for 2023-4. The freeze is set to prevent them from increasing to 52.9 pence and 54.2 pence, as multipliers usually rise with Consumer Price Inflation. This is predicted to ensure that bills remain 6% lower than without the freeze, before any reliefs are applied. According to the budget, this equates to a £9.3bn tax cut over the next 5 years.

Transitional Relief Scheme

At the 2023 revaluation, bill increases caused by changes in rateable values will be capped.

The caps for 2023-24, which will be applied before other reliefs, are as follows:

Upwards Caps

2023/24

2024/25

2025/26

Small (RV up to £20k or £28k in London)

5%

10%

25%

Medium (RV between £20k to £100k)

15%

25%

40%

Large (RV greater than £100k)

30%

40%

55%

The Autumn Statement states that the 300,000 properties that see falls in their rateable value will see the benefit of that reduction in their business rates bill from April 2023.

Sector Specific Support

Additional business rate relief for three sectors: leisure, retail and hospitality will be increased to 75%. This is capped at £110,000 per business for 2023-2024. Chains that reach this cap will still be able to benefit from the multiplier freeze and transitional relief scheme.

Small Business Support

The smallest businesses will see bill increases capped at £600 per year, starting on 1 April 2023. This is targeted at businesses losing Small Business Rate Relief or Rural Rate Relief and should mean that they will not see a bill increase of more than £50 per month between 2023-2024.

Improvement Relief

From April 2024, a new improvement relief will be introduced, and will be available until 2028 at which point the relief will be reviewed. It will apply to those who make qualifying improvements to property which they occupy and mean that ratepayers will not see an increase in rates for 12 months.

Online Sales Tax (OST)

Whilst there has been much discussion about the introduction of an OST, the Government decided not to introduce one, explaining its decision by reference to its complexity and the risk of creating unintended distortion or unfair outcomes between different business models.