Professional Adviser and Independent Retail News quote Sarah Morley on the impact of Business Rates changes in the 2025 Budget on retail and leisure
Chancellor Rachel Reeves has made a series of changes to business rates in the 2025 Budget, trailed ahead of her speech after an accidental leak by the Office of Budget Responsibility (OBR).
The report revealed that alterations include changes to the multipliers which are used to uprate business rates each year, which will reduce rates for retail, hospitality and leisure properties, and increase rates for high-value properties, and that a transitional relief package "will also cap increases following revaluations due in 2026".
It also added: "There are also extensions to measures which allow certain local authorities to retain a higher proportion of business rates revenue locally."
The measures, it said, together reduce receipts by £1.2bn on average between 2026/27 and 2028/29, but are "broadly neutral by the end of the forecast as the transitional relief package and local retentions are due to expire".
Elsewhere, the report said business rates were expected to raise £34bn (1.1% of GDP) in 2025/26, a rise of 4.9% per cent from 2024/25.
Sarah Morley, Partner in our Real Estate team, comments on the impact of the changes on the Retail, Hoispiality and Leisure sectors, as well as data centres and warehouses, in Professional Adviser and Independent Retail News. She explains:
"Today's changes to business rates will be welcomed by many in the leisure sector and smaller retailers, who will see a reduction in their rates bills. This will be a relief to many such businesses that have been struggling in these and other headwinds.
"It comes as well as an extension for a further two years of relief for small businesses expanding into a second site, the idea presumably being that it will encourage small businesses to grow, rather than act as a deterrent.
"For larger retail chains, the relief in respect of their smaller outlets will be offset by higher rates bills for their larger emporiums now subject to the higher multiplier, despite strong warnings about the potential impact on food price inflation.
"Larger datacentres and warehouses are will also shoulder higher costs, and it's unclear whether this could dampen investment appetite in those areas.
Read the full article in Professional Adviser here and Independent Retail News here.
