The government has unveiled a transitional business rates relief scheme, a freeze on multipliers and increased support packages, but the next revaluation of rates will go ahead in April 2023.

In the autumn statement, chancellor Jeremy Hunt said the planned revaluation of business rates would go ahead next year, potentially causing associated costs to soar due to rampant inflation. 

However, to soften the blow, the chancellor announced support packages that he said would save retail, hospitality and leisure businesses £13.6bn over the next five years as they transition to their new bills. 

Hunt said business rates multipliers would be frozen from 2023/24 at 49.9p and 51.2p and also unveiled a transitional relief scheme, which will cap increases caused by the increase in rateable value at the next valuation. 

The ‘upward caps’ will be 5%, 15% and 30% respectively for small, medium, and large properties in 2023/24. They will be applied before any other reliefs or supplements.

A transitional relief scheme has long been called for by the likes of the British Retail Consortium, which Hunt singled out in his statement.

The chancellor also announced an increase in support for eligible businesses up to 75% on rates up to £110,000 per business and a business rates cap for smaller businesses. 

Buried in the detail of the statement, the government said it would not be introducing a specific online sales tax. The government said this decision “reflects concerns raised about an online sales tax’s complexity and the risk of creating unintended distortion or unfair outcomes between different business models”.

It promised the full details of the online sales tax consultation would be published “shortly”.

BRC chief executive Helen Dickenson said: “The announcements today show the government has heard the concerns of the retail industry. Retailers are working incredibly hard to support customers – expanding value ranges, fixing the prices of essential items, and offering discounts to vulnerable households. This Autumn Statement supports that commitment by reducing upwards pressure on prices in the short term, and helping retailers protect jobs, keep shops open, and protect the vibrancy of local communities. 

“The Government has taken an essential step towards longer term reform of the broken business rates system by announcing the scrapping of downwards phasing of transitional relief. This decision means that April’s bills reflect market conditions and retailers will pay only what they owe, rather than being forced to overpay their rates bill when the value of their property has already fallen. This represents the first step towards a more fundamental reform of the broken business rates system.”

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