Legislation introduced to cut business rates for retail, hospitality and leisure properties

Draft legislation has been published that will see retail, hospitality and leisure properties see their business rates permanently cut from 2026.

The Non-Domestic Rating (Multipliers and Private Schools) Bill will introduce new permanently lower multipliers for retail, hospitality and leisure properties that comprise the bulk of high street business premises.

From 2026, the rates cut will replace rates relief schemes, currently providing a 40% relief on business rates up £110,000 and available to around 250,000 business properties. The Bill will also introduce a higher multiplier for the top 1% most valuable properties – those with a rateable value of at least £500,000 – such as large distribution centres used by online retailers.

James Murray, Exchequer Secretary to the Treasury, said:

“For too long the business rates system has been working against our high streets.

“Today is a major step towards our new system that will support retail, hospitality and leisure businesses on our high streets to succeed.

“This Bill paves the way for a permanent cut to their tax rate, helping to level the playing field between them and online and out-of-town businesses.“

Groups representing small businesses and leading retail sector figures have welcomed how the Bill will change business rates.

Sebastian James, former CEO of Boots and Dixons Carphone, said:

“It is very welcome to see the Government take steps to rebalance the heavy business rates load on bricks and mortar retail and hospitality as businesses, both large and small, in this vital sector seek to mitigate cost pressures in order that our high streets up and down the country can flourish as the centres of their communities.“

Craig Beaumont, Federation of Small Businesses Executive Director, commented:

“For far too long, permanent business rates reform has been put into the too difficult box. It is extremely encouraging on rates to see Ministers standing up for small firms in retail and hospitality and taking long-term action necessary to the future of our high streets – we look forward to continuing to work in partnership with the new Government to make sure no small businesses whatsoever are blocked from achieving their ambitions by a rates system that has not simply not kept pace with the needs of a modern economy.“