Rachel Reeves delivered a record breaking​ Autumn Budget 2024 on 30th October.
 
Prior to being elected, the Government had suggested that they would “replace the business rates system (in England), so we (Labour) can raise the same revenue but in a fairer way. This new system will level the playing field between the high street and online giants”.
 
Key points from the Autumn Budget, and the Business Rates Discussion Paper released immediately after the Chancellor had made her speech;
 

• Business Rates are here to stay, no alternative tax base has been mentioned, and the 2026 and 2029 revaluations are referred to in the discussion paper.
• Retail Hospitality & Leisure (RHL) will receive relief in 2025/26 but not at the levels provided in 2024/25.
• Permanently lower multipliers for those RHL properties with RVs below £500,000 from 2026/27 funded by higher multipliers for properties above £500,000 RV.
• ‘Duty To Notify’ will be trialled from 2026, and mandated from 2029.
• Private schools in England will no longer be eligible for Business Rates relief from 2025.

The Chancellor set out a package for the RHL sector, providing £1.9 billion of support to small businesses and the high street in 2025/26. This amounts to 40% relief on bills for RHL properties, up to a £110,000 cash cap per business.
 
Whilst a continuation of relief provisions for the retail sector is welcome news, yesterday's announcement represents a substantial drop for retailers that are currently benefiting from a 75% relief in the 2024/25 rate year.
 
The small business rates multipliers will be frozen in 2025/26, while the standard multiplier will be uprated by the September 2024 CPI rate.

This means that non-Domestic tax rates next year will be based as follows for properties in England:
 

Basic Property Rate	49.9p
Higher Property Rate	55.5p

In addition to the above, the Chancellor announced the following measures for 2026/27:

• The Government intends to introduce permanently lower business rates multipliers for RHL properties below £500,000 RV from 2026/27.
• To make sure this tax cut is fiscally sustainable, the Government intends to introduce a higher multiplier for properties with Rateable Values above £500,000 RV. This would seem to apply to properties across all sectors.

This appears to be the extent of the attempt to address the imbalance between the tax paid by high street and online retail. Online retailers will pay increased liabilities on warehouses above £500,000 RV whilst smaller high street retailers benefit from the lower multiplier from 2026.

To help fund the Government’s priorities for education and young people, it is delivering on its commitment to charge VAT on private school fees and to remove business rates charitable relief in England.

As announced on 29 July 2024, private schools in England will no longer be eligible for charitable rate relief.

The Ministry of Housing, Communities and Local Government (MHCLG) will bring forward primary legislation to amend the Local Government Finance Act 1988 to end relief eligibility for private schools.

This change is intended to take effect from April 2025, subject to Parliamentary process.

Private schools which are ‘wholly or mainly’ concerned with providing full time education to pupils with an Education, Health and Care Plan will remain eligible for relief.

It is confirmed that the Valuation Office Agency (VOA) is publishing a response to the March 2023 Consultation on Disclosure, which sets out the next steps on increasing the transparency of business rates valuations by disclosing relevant information.

Set out below is the phased implementation of the new transparency requirements which will begin in 2026, with most ratepayers being able to access more tailored details about comparable properties:

• Greater Transparency for the 2026 Rating List will enable ratepayers to see properties most comparable to their own.
• ‘Duty To Notify’ will be rolled out from April 2026 and formally activated and mandated from April 2029.
• 2029 Rating List will see transparency expanded with underlying valuation evidence provided to ratepayers.
• After 01 April 2029, there will be a simplifying of the Challenge process and a new timeframe to formally challenge a rating assessment.
• It is not clear how this impacts the shortened appeal window which had been proposed from April 2026. CBRE have sought clarification from Government on this point.

The Government have confirmed in the Autumn Budget Red Book that they will extend 100% business rates retention for 2025/26 for the flowing authorities:

• West of England Combined Authority
• Cornwall
• Liverpool City Region

The Government is also extending 67% business rates retention arrangements for the Greater London Authority for 2025/26.

Alongside the Budget, a Business Rates Discussion Paper has been published, setting out the Government’s priority areas for these reforms, and inviting industry to help co-design a fairer business rates system.

If you wish to be involved, then Government is conducting engagement between November 2024 and March 2025, with an initial phase of engagement before Christmas.

The consultation intends to revisit the Empty Rates Relief regime to consider if the minimum occupation period is sufficient, as well as review how a ‘general anti-avoidance rule’ might be established to counter new avoidance schemes as they emerge.
 
If you would like to be involved, please contact transformingbusinessrates@hmtreasury.gov.uk by 15 November 2024.