Correspondence

5/2023: Autumn Statement business rates measures

Published 23 November 2023

Applies to England

To: Chief Finance Officers of English Billing Authorities - For the attention of the Business Rates section

From: Non-Domestic Rates Team, LGF - Local Taxation, Department for Levelling Up, Housing and Communities (ndr@levellingup.gov.uk)

Date: 23 November 2023

Business Rates Information Letter (5/2023): Autumn Statement business rates measures 

This is the fifth business rates information letter to be issued by the Department for Levelling Up, Housing and Communities this year. 

See previous letters and archived letters.

Autumn Statement 2023 business rates measures

At the Autumn Statement on 22 November, the Chancellor announced a package of support worth £4.3 billion over the next 5 years to support small businesses and the high street.

For 2024/25 the Chancellor announced, that:

• the small business multiplier will be frozen at 49.9p
• the standard multiplier will be uprated in April by September’s CPI figure (6.7%), increasing the multiplier from 51.2p to 54.6p
• the 2024/25 Retail, Hospitality and Leisure (RHL) scheme will be extended for a fifth year into 2024-25, retaining the existing scope and providing eligible properties with 75% relief, up to a cap of £110,000 per business

These changes will have effect from 1 April 2024.

Local authorities will be expected to use their discretionary relief powers (under section 47 of the Local Government Finance Act 1988) to grant Retail, Hospitality and Leisure relief in line with the relevant eligibility criteria. Authorities will be compensated for the cost of granting these reliefs via a section 31 grant from the government. No new legislation will be required to deliver this scheme.

The Department will shortly publish updated guidance for local authorities for the 2024-25 Retail, Hospitality and Leisure scheme. The existing scope of the scheme, percentage of support and cash cap will be retained.

The department expects councils to ensure that their systems are updated, including the implementation of any necessary software changes, and that bills issued for the 2024-25 tax year reflect the changes announced at the Autumn Statement.

New Burdens

The department recognises that implementing and administering the Retail, Hospitality and Leisure relief scheme and changes to the NNDR process will place additional burdens on billing authorities and confirms that New Burdens funding for additional costs will be provided.

In accordance with the New Burdens doctrine, the department will in due course conduct an assessment of the expected reasonable additional costs of the new software, staffing and administration with representatives of billing authorities.

Changes to legislation

Following the enactment of the Non-Domestic Rating Act 2023 (“the Act”) detailed in BRIL 4/2023, the department has now made four sets of associated regulations to bring certain measures info effect, detailed below.

Non-Domestic Rating Act (Commencement) (England) Regulations 2023

These regulations bring into force section 15 of the Act, which makes changes to the rules for the business rates multipliers. This part of the Act ensures that annual increases in the small business multiplier and the national non-domestic multiplier are automatically linked to the Consumer Prices Index (CPI) rather than the Retail Prices Index (RPI) and provides that the government may under-index the multipliers at different levels. The Treasury will shortly bring forward regulations freezing the small business multiplier. 

In addition, clauses 1 to 3 of the Act allow the Treasury to determine by regulations which ratepayers are entitled to the small business multiplier in England. The government intends to retain the threshold for the national multiplier at £51,000 but extend eligibility for the small business multiplier to properties below that threshold which are vacant, on the central list or occupied by charities. The Treasury will shortly bring forward those regulations. 

Non-Domestic Rating (Small Business Rate Relief) Regulations 2023

These regulations replace an earlier set of regulations prescribing the conditions for the application of the Small Business Rate Relief (SBRR) and the value of relief. The policy regarding this relief is unchanged but this instrument is needed following changes to the configuration of the relevant enabling powers made by the Act.

Non-Domestic Rating Act (Consequential and Other Amendments) Regulations 2023

These regulations implement consequential changes to secondary legislation following the passing of the Act, and minor drafting changes to correct out of date references. The instrument also gives effect to two outstanding policy commitments: (1) revoking the rules concerning the application of discretionary relief by local authorities, (2) providing that relief for unoccupied properties is available to properties on the central rating list as well as local lists.

Non-Domestic Rating (Heat Networks Relief) (England) Regulations 2023

Following the Business Rates Review, the government announced that it would deliver a 100% relief for eligible low-carbon heat networks with individual rates bills. This relief has been provided in 2022/23 and 2023/24 through a discretionary relief scheme operated by billing authorities. The Act moves this onto a mandatory statutory footing.

These regulations set out the parameters and conditions for access to the heat network relief. These will remain unchanged from the previous discretionary scheme, except that, as a mandatory relief, local authorities will now be able to benefit from this relief from 1 April 2024.     

These regulations have effect for the year 2024/25 onwards.

Regulations to implement the Improvement Relief scheme for 2024/25 will be made shortly. 

See BRIL 4/2023 for further details concerning the Non-Domestic Rating Act 2023.

This letter covers the Non-Domestic Rating Act 2023.