Key Reforms to Business Rates from April 2025

Business rates have been the subject of debate for many years. The Government have today agreed that reform is needed acknowledging that it cannot happen overnight.

The announcements in the Autmn Budget provide that the existing 75% discount on retail, hospitality and leisure (RHL) business rates, due to end on 31 March 2025, will be replaced by a 40% relief in 2025-26 up to a cash cap of £110,000 per business. This still means that many businesses will see their business rates nearly double. The small business multiplier will be frozen in 2025-26 and lower multipliers will be introduced from April 2026 for RHL properties with a rateable value (RV) of less than £500,000. Properties with an RV of £500,000 and above will see an increase in multipliers.

Moving forward, the Government plans to engage with interested parties and stakeholders with regard to further reform. It also acknowledges that a minority of businesses abuse the current system and as a result, it will also publish a consultation on adopting a General Anti Avoidance Rule for business rates in England.

None of the above will offer immediate relief to struggling retailers, many of whom will also be affected by the proposed rises in minimum wage rates and the 1.2% increase in the rate of employers NIC, coupled with a £4,100 reduction in the threshold at which employers NI becomes payable.