The UK Government has announced that this year’s Autumn Budget will be a little later than usual, taking place on Wednesday 26th November.
It is widely anticipated to bring major changes to the business rates system – reforms which will affect thousands of occupiers of commercial property across England.
The impact will vary depending on the location and size of the business premises, as well as its use, with some companies likely to benefit while others could face significantly higher business rates bills.
So, what exactly is on the horizon for business rates reform, and how could it affect your business? Adam Barnfield, Partner and Head of Business Rates at Vail Williams LLP, explains.
Given how late the Budget is scheduled this year, it would not be surprising if the Draft Rating List came out simultaneously. If this happens, it will no doubt muddy the waters surrounding the impact of business rates, but we will have to wait and see.
What we can expect, is confirmation of changes to the business rates multipliers.
Changes to multipliers
The Budget is when the Chancellor usually announces what the business rates multipliers will be for the forthcoming rating period.
“Our assumption is that five multipliers will be created, with the intention of balancing the burden of business rates on certain sectors. And whilst the motivation for this is good, there is some concern that this will further complicate an already overly complex tax, adding even more room for potential error and potentially increasing rate appeals in the future,” explains Adam.
The Government has also signalled support for the UK high street, with changes proposed to Retail, Hospitality and Leisure (RHL) relief.
- Retail, Hospitality, and Leisure (RHL): We expect to see two permanently lower business rates multipliers for retail, hospitality and leisure (RHL) properties. These savings will be funded by a supplementary multiplier which has been suggested to be 20% above the standard multiplier for properties with an RV above £500,000.
“While smaller retailers may benefit from this change, larger occupiers will see their rating bills rise – and it won’t just affect the retail and e-commerce giants like Amazon. Under this expanded umbrella will come large schools, colleges and universities, as well as hospitals and stadia – with football, rugby and cricket clubs all affected by the £500,000 threshold.”
- Small Business Multiplier: We could see the small business rates multiplier frozen, which will be welcomed.
