PARLIAMENTARY WRITTEN QUESTION
(13 November 2024)

To ask the Chancellor of the Exchequer, pursuant to the Answer of 6 November 2024 to Questions 11930 and 11931 on Business Rates: Tax Yields, whether the real terms monetary value of the tax reduction from the new Retail, Hospitality and Leisure multiplier from the 2026-27 financial year is intended to be the same as the real terms monetary value of the Retail, Hospitality and Leisure rate relief provided to qualifying hereditaments in the 2024-25 financial year.

Asked by:
David Simmonds (Conservative)

The existing retail, hospitality, and leisure (RHL) relief has been repeatedly extended year-by-year as a temporary stopgap measure. The Government recognises that this creates cliff-edges and uncertainty for businesses, as well as significant fiscal pressure.

That is why, from 2026-27 the Government intends to introduce permanently lower tax rates for RHL properties, including those on the high street. There will be two lower RHL multipliers, with the lowest rates paid on smaller RHL properties with a rateable value under £51,000.

This permanent tax cut for RHL properties must be sustainably funded, and so the Government intends to apply a higher rate from 2026-27 on the most valuable properties - those with a Rateable Value of £500,000 and above. These represent less than one per cent of all properties, but include the majority of large distribution warehouses, including those used by online giants.

The exact rates for all new business rate multipliers will not be set until Budget 2025 so that the Government can take into account the revaluation outcomes as well as the economic and fiscal context.

However, the Government recognise that RHL businesses will need support during the interim period for 2025-26, and so we are providing 40 per cent relief to RHL properties up to a cash cap of £110,000 per business. Alongside freezing the small business multiplier, this is a support package worth more than £1.6 billion in 2025-26.

Answered by:
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1 January 1970