Today saw the Chancellor announce the autumn statement, which predictably focused on tax increases and spending cuts.
Businesses may have expected little or no positive announcements regarding their rating liability, but this has been a good news story for ratepayers, with the retail & leisure and hospitality sectors seeing the most significant benefit.
The key headlines include:
- The 2023 rating revaluation is confirmed and will take place as expected.
- The UBR multiplier has been frozen (at 51.2p for most).
- The Retail, Leisure and hospitality sectors will benefit again in 2023-24 from retail rate relief of up to 75%, subject to a cap per business of £110,000.
- Downwards transition will be abolished, meaning any assessments which decline will not be subject to a phased downward reduction.
- An upwards transitional scheme, designed to guard against large RV increases at the revaluation (with no inflation added in 2023-24), has been provided as follows:
|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 Chancellor was in a corner regarding business rates and was not tempted to postpone the revaluation due for a second time. This is good news for the retail sector, which should lead to a fall in rates payable from next year in some struggling town centres.
All businesses will benefit from the UBR freeze, and those with lower rateable values will benefit from an incremental increase in rates payable where their assessments have increased.
The downside is an acceleration of the upward phasing for occupiers (or owners), with the largest assessments at over £100,000 RV. This will result in some significant increases where rents (or rental values) have risen between 2015 and 2021. The effects may be particularly stark for those property types in the industrial sector or where rateable values have been calculated with regard to build costs (including hospitals and schools).
Overall, businesses and other ratepayers should be happy with the announcement following today's Autumn Statement. Those who will face the largest increases are those outside of retail or leisure with significant rateable value increases with assessments in excess of £100,000.
The draft 2023 revaluations have now been released, providing certainty to businesses and allowing them to calculate accurate budgets from 1st April 2023.