The final Fundamental Review of Business Rates report was published today, with no major reforms to the system proposed, but various specific reliefs announced.
The annual multiplier, which is used to calculate the annual Business Rates liability, was due to increase next year in line with the Consumer Price Index (CPI) but has now been frozen. All business occupiers should benefit from this reduction.
In addition, a temporary 50% cut in liability was announced for 2022/23 for retail, leisure and hospitality properties, up to a maximum of £110,000 per business. A further announcement was made on a new investment relief for companies adopting green technology (such as solar panels and heat pumps) and a further relief on any expenditure on improving properties. Such improvements will be exempt from Business Rates for 12 months starting from 1 April 2023.
Finally, the government announced a move to 3-yearly revaluations from 1 April 2023 in order to ensure that the Business Rates system keeps up with changes in the economy.
All business occupiers.
As described above the measures have effect from 1 April 2022 and 1 April 2023 respectively.
These reliefs are more generous than had been expected and the published overall Business Rates savings of £7billion (over five years) are significant when considered against the annual total of Business Rates of £25billion. The temporary 50% cut in Business Rates next year will be very welcome in those affected sectors. However, this will be particularly beneficial to smaller operators as larger businesses may be subjected to the ceiling of £110,000. Retail occupiers will significantly benefit from this as they typically pay circa 25% of the total of Business Rates.