The autumn budget included measures to help businesses in some industries who pay business rates. You could qualify for business rates relief if your business is classed as being in the retail, leisure or hospitality sectors.
This means shops, restaurants and gyms could be entitled to a considerable saving on their current non domestic rates to help cover the meaningful rise in energy costs.
For some retail businesses this could replace the retail discount which ended on 1 April 2022.
What is the business rates relief for retail, leisure and hospitality?
- 50% business rates reduction for the 2022 to 2023 tax year.
- 75% business rates reduction for the 2023 to 2024 tax year.
The maximum non domestic rates relief any one business can receive is £110,000 per tax year.
If you decide to opt out of retail, leisure or hospitality relief in either of the 22/23 or 23/24 tax years you cannot change your mind at a later date.
Business rates multipliers frozen
In addition to business rates relief the Chancellor announced that the business rates multipliers will be unchanged and frozen at their current levels.
The current business rate multipliers are 49.9p (for small business) and 51.2p (standard) and will be kept in place until the end of the 2023 tax year.
Rate multipliers are used along with a properties rateable value to work out what business rates are applicable.
By not increasing the business rate multipliers the impact of any business rate rise is minimised.
Revaluations by the VOA
The valuations office agency is responsible for giving rateable valuations and it’s been longer than five years since the last revaluation. Historically revaluations were planned to take place every five years however the target is now every three years which will help keep valuations more current.
The VOA expect the next revaluation to begin in 2023 and then every three years thereafter.
Other business rate news
Transitional relief scheme one year extension
The transitional relief scheme was granted a one year extension. The transitional relief scheme started alongside the last revaluation of business rates in 2017. It sets limits to the amount a business rates bill can increase or decrease annually after a revaluation by the VOA.
100% improvement relief
A 100% improvement relief will be given for higher business rate bills caused by improvements to an existing property. The relief will applicable for 12 months and will run from 2023 to 2028.
Exemption for eligible plant and machinery used for renewable energy
From 2023 to 2035 an exemption from business rates for “eligible plant and machinery used in onsite renewable energy generation and storage, such as rooftop solar panels and battery storage used with renewables and electric vehicle charging points”
100% relief for eligible low carbon heat networks
100% relief for eligible low carbon heat networks from 2023 to 2035. The property has to be listed as separate on the rating list to be eligible.
Some predict a reduction in rateable values in the retail sector due to the difficulties experienced by this sector mainly caused by Covid-19 and online competition.
In contrast particular properties used within the industrial and logistic sector could see an increase in their VOA rateable values.
Business rates revaluation 2023
The Valuation office agency regulates and establishes rateable values for business premises. As part of the valuation process the VOA goes through a revaluation exercise usually every five years.
The next revaluation is taking place on the 1 April 2023 which will see a seven year gap from the last VOA revaluation.
New rateable values will be based on rental levels from April 2021 which could see substantial changes to rateable values for businesses in a number of sectors.
Can I appeal a business rates revaluation?
The government allow you to check and challenge your business rates valuation. The VOA will review your challenge case and provide you with a response based on the facts of your case.
The VOA let check and challenge your business rate valuation online.
