Could Welsh business rates support provide a blueprint for England?

From 1 April 2027, eligible hospitality and leisure properties in Wales with a rateable value below £51,000 will qualify for the lower business rates multiplier currently applied to small and medium-sized retail shops.

The Welsh Government says this will cut bills by 30% for qualifying businesses, an increase from the existing 15% which is only applicable to Food and Drink Hospitality Relief, and includes pubs, restaurants, cafés, hotels, cinemas, theatres and gyms. Eligible retail shops will continue to benefit from the lower multiplier.

The Regulations are expected to be introduced this autumn and, subject to Senedd approval, will take effect from April 2027. The precise multiplier values will then be confirmed as part of the Welsh Government’s budget preparations.

What makes this change significant, according to Adam Barnfield, Head of Business Rates at Vail Williams, is that it is not another temporary business rates relief scheme requiring annual renewal.

The Welsh Government is embedding support within the multiplier, giving qualifying businesses greater certainty over their future business rates liabilities. And in the current economic climate, that certainty really does matter.

Business rates are one of the largest fixed occupational costs facing many high street businesses in the UK. Unlike taxes linked directly to turnover or profit, business rates remain payable regardless of how well a business is trading.

However, retail, hospitality and leisure operators have continued to contend with higher staffing, energy and supply-chain costs, alongside cautious consumer spending in recent years. You have only to look at our ailing highstreets and empty shopfronts to see that many of these retailers are at breaking point.

For businesses operating on narrow margins, a significant increase in their business rates liability can affect decisions about investment, recruitment and, ultimately, whether a location remains viable.

Some businesses saw bills rise from April 2026 following changes in rateable values, the withdrawal of the previous RHL relief scheme and the introduction of the new multiplier system, although transitional measures have limited the immediate increase for qualifying ratepayers.

What is the business rates position for the high street in England?

England introduced permanently lower business rates multipliers for qualifying retail, hospitality and leisure properties from April 2026.

These replaced the previous annual RHL relief scheme and apply to eligible properties with rateable values below £500,000. The two RHL multipliers are set 5p below their respective national multipliers.

The Government has also announced a 20% reduction for eligible pubs, social clubs and live music venues from April 2027. This follows the 15% relief available to qualifying pubs and live music venues in 2026–27. Hotels, restaurants, cafés and other parts of the hospitality sector are not included in the additional 20% measure and continue to call for greater support.

In a widely anticipated the Government has said that it will return to wider business rates reform, including Small Business Rates Relief, at the Autumn Budget.

The Welsh announcement will add weight to calls for the Chancellor to provide broader support, although the increasingly constrained fiscal position may limit the scope available.

The case for greater business rates certainty

According to Adam, the challenge with short-term business rates reliefs is that they make it difficult for businesses to plan.

“A one-year discount may ease immediate pressure, but it offers limited confidence to an operator considering a new lease, refurbishing its premises or opening another location. More permanent or multi-year measures provide a much stronger basis for investment. The only issue is that further temporary changes add further still to the complexity of the business rates landscape.

“Ideally, we would like to see wholesale reform of the business rates system, which many in the industry, including Vail Williams, have been calling for over many years. With a new Prime Minister and Chancellor in place, and the Government already committed to revisiting wider business rates reform at the Budget, now is an opportunity to consider whether this complex property tax remains fit for purpose,” explained Adam.

There will, of course, be questions about how further support would be funded. In England, the 5p reduction applied through the RHL multipliers is funded partly by a higher multiplier for properties with rateable values of £500,000 or more.

The recently announced 20% reduction for pubs, social clubs and live music venues is expected to be funded through measures including a review of reliefs for certain other businesses and action against tax non-compliance by sellers using online marketplaces.

Adam adds: “Any extension of this must be carefully designed to avoid transferring a disproportionate burden to other ratepayers, particularly businesses occupying large premises but operating on relatively tight margins. The Autumn Budget presents an opportunity for the Government to review whether the current balance is right.”

Wales has made a clear policy choice to use the business rates system to support the businesses that contribute to the vibrancy of its high streets and town centres.

Whether England follows Wales by broadening its support remains to be seen, but the announcement strengthens the case for more comprehensive business rates reform and greater long-term certainty for high street businesses.

With the business rates landscape continuing to evolve, occupiers should understand their eligibility for relief, check their new rateable values and budget beyond the current financial year.

Vail Williams’ Business Rates team will monitor the Autumn Budget closely and provide further guidance when any changes are announced.