We are six months into the new Rating List which saw the total Rateable Value across England and Wales increase by 7.1% to £70.3bn. If you dig deeper into these statistics you will see that the Industrial/Light Industrial industry felt the brunt of the increases with the sector averaging a 27% increase in their Rateable Value.
The Government stepped in pre-revaluation to freeze the Business Rates Multiplier to ensure that there was a degree of mitigation from a huge increase, as well as introducing a 75% relief to all those within the Retail, Leisure and Hospitality sector – a real term reduction in Business Rates for thousands of businesses across England and Wales. The Retail, Hospitality and Leisure relief is due to end on the 31st March 2024 – a real time increase of £2.35bn.
However, with an election on the way in 2024 this could be the last Autumn Statement where we see the Conservatives deliver and the question needs to be asked – how long can the Government sustain this reduction in Rates collection and will they intervene to halt the immediate increase in Rates?
Traditionally, Business Rates bills rise in line with inflation and they are based on the CPI figure for the precious September. We now know that CPI stands at 6.7% for September 2023 which would create a increase of around £1.75bn directly on Business Rates bills for every business occupier across England & Wales.
At the upcoming Autumn Statement, the Chancellor will set out the Business Rates Multiplier for 2023/2024, which have currently been frozen since 2021 as part of the Government support through Covid-19 and its aftermath. The Chancellor must act to ensure that large increases do not add to the burden faced by business occupiers, we have seen the devastation to the high streets post Covid-19 and the Multiplier increase along with no additional relief for Retail, Leisure and Hospitality could be catastrophic.
Therefore, we arrive at our critical moment: while increasing Business Rates may seem like a straightforward way to generate revenue for local governments, especially with the cash strapped Thurrock, Birmingham and Woking Councils, the dangers and pitfalls associated with such decisions cannot be ignored. Careful consideration and a balanced approach are necessary to ensure that businesses remain viable and that the local economy continues to flourish. Striking the right balance between revenue generation and supporting local businesses is essential for the long-term well-being of our high streets, our industries and our local business owners.
Getting expert support and advice
At RCK Partners, our Business Rates Team can offer you expert advice and support for your Business Rates needs. Contact our team today via [email protected].
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