Despite calls to abolish business rates from some quarters, the Chancellor defended the £25 billion revenue earning tax, and instead chose to focus on relief in certain areas.
50% reduction for some sectors
From 1 April 2022, retail, hospitality and leisure sectors will enjoy a 50% discount for 12 months, up to a cash cap of £110,000 per business. Welcome news for the high street, that was already struggling before the pandemic.
Freezing the multiplier
Business rates are calculated by multiplying the rateable value (provided by the Valuation Office Agency) by either 49.9p or 51.2p depending on whether the business is ‘small’ or ‘standard’. For 2022/23 the multiplier will not be increased in line with CPI as anticipated, but will remain at the current rates.
Temporary relief for property improvements
Presumably in a bid to encourage investment, where businesses invest in their properties, the resulting increase in rateable value and hence business rates will be relieved for 12 months.
This measure will commence from 1 April 2023 and run until 31 March 2028.
Support for green technology
From 1 April 2023 and the following fifteen years, business rates will not be charged on eligible plant and machinery used for on-site energy generation and storage. This 100% relief will be extended to qualifying heat networks that have their own business rates bill.
Extension to supporting small business and transitional relief schemes
Since properties were revalued in 2017, businesses were severely affected by an increase in rateable value, and some lost access to small business rates relief entirely. To make this more manageable, the increase was phased in and spread up to 2021/22.
This measure will extend the relief for smaller businesses (owning properties with a rateable value of less than £100,000) into 2022/23, so that small and medium valued properties, as defined, will not cause a rates increase of more than 15% or 25% respectively.
Low value empty properties
Properties that are currently unused, with a rateable value of less than £51,000 will, from 2024/25, use the small business multiplier, rather than standard, as was the case previously.