The Labour Party has provided a significant update regarding business rates relief, following direct questioning in Parliament about potential extensions for retail businesses. During a recent Commons session, the issue was brought to the forefront by Conservative MP Joe Robertson, representing Isle of Wight East, who pressed the Chancellor of the Exchequer on plans to extend this crucial financial support to the retail sector.
Parliamentary Inquiry and Labour's Response
In response to the inquiry, Labour MP Dan Tomlinson, for Chipping Barnet, delivered a detailed explanation of the current system. He clarified that business rates are calculated based on the rateable value of a property, as assessed by the Valuation Office Agency, combined with multiplier values set by the government. These rateable values undergo a revaluation every three years, a process designed to reflect changing market conditions.
Upcoming Revaluation and Its Implications
Tomlinson highlighted that the most recent revaluation took effect from April 1, 2023, using values from April 1, 2021. The next significant revaluation is scheduled for April 1, 2026, based on values from April 1, 2024. This upcoming revaluation marks the first since the Covid-19 pandemic, leading to notable increases in rateable values for some properties, particularly in the hospitality sector as it continues to recover from pandemic-related disruptions.
The Valuation Office Agency has already announced updated property values from the 2026 revaluation, signalling changes ahead for many businesses. Tomlinson emphasised that while some properties face increases, the government has implemented measures to mitigate the impact.
Government Support Package for Businesses
To address concerns over rising bills, the government announced a substantial support package worth £4.3 billion over the next three years at the Budget. This package includes protections for ratepayers experiencing bill increases due to the revaluation. As a result, more than half of ratepayers will see no increase in their bills, with 23% actually witnessing a reduction.
For those facing increases, most will be capped at 15% or less next year, or limited to £800 for the smallest properties. This targeted approach aims to provide stability during a period of economic adjustment.
Eligibility and Regional Variations
Business rates relief, which offers reductions in business rates bills, is available to eligible businesses in England. However, it is important to note that the rules differ significantly if a property is located in Scotland, Wales, or Northern Ireland, reflecting the devolved administrations' authority over local taxation matters.
Tomlinson's response underscores the government's current stance, focusing on the existing support mechanisms rather than an immediate extension of relief specifically to retail. The discussion highlights ongoing parliamentary scrutiny of economic policies affecting high streets and business viability across the UK.
