Commenting on today’s many budget and the governments inaction on business rates Robert Hayton, UK President at the real estate adviser Altus Group, said:

“For a self-proclaimed low tax, pro-growth, pro-business Government, it beggars’ belief that inaction on business rates could see the total tax take rise by £5.33 billion next April with discounts for retail, leisure and hospitality ending as well as the Government profiteering from high inflation.”

Retail, leisure and hospitality relief (pandemic) relief in England

Cost 

2020/21 – £11.06bn 
2021/22 – £5.76bn 
2022/23 – £2.67bn 
2023/24 – £0 

Source: real estate adviser, Altus Group

In 2020/21, in response to the coronavirus pandemic, the Government provided 100% business rates relief to all occupied retail, hospitality and leisure businesses. In 2021/22 the relief gave a 100% discount for the first 3 months and then a 66% discount for the remaining 9 months with a cap on the relief for each business of £2 million.

But in 2022/23 it was tapered even further to 50% discount with a cap of £110,000 on the relief per business.

The relief ends completely on 31st March 2023. It wasn’t revisited in the emergency budget.

Business Rates Tax Rates (Multipliers)

In the Autumn 2017 Budget, the Government announced that the multipliers (pence in the pound) would increase in line with the previous September’s Consumer Price Index rather than the Retail Price Index.

The distribution of the business rates tax is set through revaluations which periodically reassess and update tax liabilities to reflect changes in the commercial rental market. The next revaluation comes into effect on 1st April 2023 in England based upon an estimate of open market rents on 1st April 2021.

The Government say that this will help ensure that, where there have been shifts in economic activity which have driven changes in market values, these changes will be reflected in tax liabilities.

But, despite the revaluation which will be revenue neutral, overall business rates revenue for 2023/24 will still be increased by September’s CPI measure of inflation.

CPI rose by 9.9% in the 12 months to August 2022 which, if repeated in September, would see non-domestic buildings in England such as shops, pubs, restaurants, factories and offices facing a £2.66 billion business rates hike during the 2023/24 financial year according to the real estate adviser Altus Group.

No action was taken within the emergency budget regarding the inflationary uplift this in his Statement today and hope in the next few weeks he will address this issue.”