The long-awaited outcome of the government’s 18 months fundamental review of the business rates system has produced only a small number of changes, several of which will be temporary in nature and will benefit businesses for only one year. This feels very much as if business rates continue to remain in the “too difficult to change” in-tray, with the government perhaps fearful of losing some of the £25 billion that business rates raise each year.
The main changes announced are:
- A very welcome relief for the Retail, Hospitality and Leisure sector whereby their business rates will be reduced by 50% for the 2022-23 tax year (this is essentially an extension of the current Covid relief whereby properties in this sector are eligible for a two-thirds reduction for the 2021-22 tax year).
- All businesses will benefit from a freezing in the business rates multiplier for the 2022-23 tax year.
- The current five-yearly cycle of revaluing properties will change to a three-yearly cycle with effect from 2023.
- Introducing a new relief in April 2023 to support investment in property improvements. This new relief will provide 12 months of exemption from any increase in the rateable value of a property that arises from property improvement expenditure e.g. increasing the size of a property, or installing improvements such as CCTV.
- Introducing new measures from 2023 to support green investment and the decarbonisation of non-domestic buildings. These measures will ensure that businesses are exempt from any increase in rateable value for a period of 12 months which arises from expenditure on equipment such as rooftop solar panels and battery storage used with renewables and electric vehicle charging points.
The government also announced that it will continue to listen to the calls for an Online Sales Tax and will publish a new consultation shortly.
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