Business rate changes 2023
Prices are rising around the world and shops and businesses are facing these costs head on. From 1 April 2023, many businesses will be facing new business rates bills too, following a revaluation which allocates new rateable values to commercial properties to reflect more recent market conditions.
In light of both of these, the government will be taking a number of steps to help ratepayers. These changes will come into effect from 1 April 2023.
Freezing the business rates multiplier
Business rates bills are calculated by multiplying the rateable value of a property by either the small business multiplier or the standard multiplier and subtracting any relevant reliefs. Multipliers usually rise with Consumer Price Inflation (CPI) inflation, but freezing the business rates multiplier will keep the small business multiplier and standard multiplier at 49.9p and 51.2p respectively – rather than rising to 52.9p and 54.2p. This will mean that bills are 6% lower than without the freeze.
An extended and increased relief for retail, hospitality and leisure businesses
To support high street properties, the government is extending and increasing the Retail, Hospitality and Leisure relief scheme from 50% to 75% for 2023- 24, up to £110,000 per business. This is the most generous in year business rates relief in over 30 years, outside of Covid-19 support.
Reforming Transitional Relief
The transitional scheme supports ratepayers facing large increases in their business rates bills as a result of a revaluation, as well as capping how much a bill can reduce by. By abolishing downwards transitional caps, businesses who see a declining business rates bill as a result of the revaluation will benefit from the full decrease straight away.
Protection for small businesses
Those businesses who lose eligibility for either Small Business or Rural Rate Relief will benefit through a Supporting Small Business scheme where the increase in their bill will be capped at £600 per year for 3 years.