Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the absence of a cash cap on the cost of retail, hospitality and leisure (RHL) rate relief in 2026-27; and what estimate she has made of the gross revenue required from the multiplier surcharge on hereditaments with a Rateable Value above £500,000 to fund the new RHL multiplier in 2026-27.

Retail, Hospitality and Leisure (RHL) relief has been extended year-by-year by previous governments since the pandemic – creating uncertainty for businesses and an unsustainable fiscal pressure for the Government.

Without any government intervention, RHL relief would have ended entirely in April 2025, creating a cliff-edge for businesses. Instead, the Government has decided to offer a 40 per cent discount to RHL properties up to a cash cap of £110,0000 per business in 2025-26, ahead of introducing permanently lower tax rates for RHL properties from 2026-27. Like all business rates multipliers, these lower RHL multipliers will not be subject to a cash cap. This permanent tax cut will ensure that RHL businesses benefit from much-needed certainty and support.

This tax cut must be sustainably funded, and so we intend to apply a higher rate from 2026-27 on the most valuable properties – those with a Rateable Value of £500,000 and above.

The rates for any new business rate multipliers will be set at Budget 2025 so that the Government can take into account the upcoming revaluation outcomes as well as the economic and fiscal context.