Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether his Department has made a recent assessment of the extent to which business rates applicable to (a) small and (b) large businesses which mainly operate through physical premises adequately reflect their business costs.

The recent revaluation of business rates, which came into effect on 1 April 2023, ensures rateable values, and therefore bills, more accurately reflect current market values. The Government is legislating for more frequent revaluations, from every 5 years to every 3 years, a key stakeholder ask which will permanently make the system fairer and more responsive for all ratepayers.

The Government has also announced a package worth £13.6 billion over the next five years to support businesses with the revaluation, including:

• a freeze to the business rates multiplier for 2023-2024, a tax cut worth £9.3 billion over the next 5 years, meaning all bills are 6 per cent lower than without the freeze;
• an increased 75 per cent relief for retail, hospitality and leisure properties, up to a cash cap of £110,000 per business for 2023-24. This is a tax cut worth over £2 billion for around 230,000 RHL businesses, to support the high street and protect small shops;
• an Exchequer funded Transitional Relief scheme worth £1.6 billion to protect an estimated 700,000 ratepayers facing bill increases due to increases in rateable value;
• £500 million of support over the next three years through a new Supporting Small Business scheme. This will cap bill increases to £50 per month for businesses losing some or all of their Small Business or Rural Rate Relief due to the revaluation.

Regarding small businesses, the Government has continued its generous Small Business Rate Relief scheme which means over a third of properties (720,000) pay no business rates at all, with an additional 76,000 in the taper benefitting from reduced bills.