Welsh Government Unveils Plans to 'Rebalance the Rates System in Favour of Retail'
The Welsh Government has announced a 12-week consultation on the plans, which it says could benefit around 13,000 retail properties across Wales.
It would cut rates for retail shops with rateable values less than £51,000 in a move the Welsh Government says would help them compete with online retailers. Larger properties with rateable values of more than £100,000 could be charged 'slightly more', but some public buildings like hospitals and schools would be protected.
The Welsh Retail Consortium said it was concerned that the proposed changes would adversely affect larger retail premises, whilst UKHospitality Cymru say the outline proposals 'simply ignored' the challenges being faced by hospitality. It warned that returning the sector to full business rates and excluding it from reform would see bills 'dramatically increase', which it said would force businesses to cut jobs, reduce trading hours or, in the worst-case scenario, close for good.
If approved, the changes would start on April 1 2026. The exact rates would be set during the Welsh Government's budget planning for 2026-27.
Welsh Government Finance Secretary Mark Drakeford said:
'This proposal would help re-balance the rates system in favour of retail shops, supporting the ongoing viability of the sector which faces unique challenges from online competition.
'As part of our shared strategic vision for retail and retail action plan, we're taking meaningful steps to strengthen our local economies and create more vibrant high streets across Wales.'
Sara Jones, Head of the Welsh Retail Consortium, said:
'Welsh Ministers have made headway on aspects of the business rates agenda in recent years, notably introducing more regular revaluations. However, the Welsh business rate is the highest in Great Britain and has risen to a 26-year high at a time when retailers are being thwacked by a range of statutory costs.
'Whilst the consultation on proposals to reduce rates for the smallest shops sound like an encouraging step, a high proportion of retailers operate from medium-sized and larger premises. These are shops that help underpin the health and vitality of our town and city centres and high streets across Wales and account for a large share of retail jobs.
'The proposals as they stand suggest these stores could pay even more than they do at present, and more than their counterparts occupying equivalent stores in England. We need to ensure a commensurate rates reduction applies to medium-sized and larger stores too. It's not in the interests of the Welsh economy for retailers to be incentivised to invest in Cheltenham over Cardiff.'
David Chapman, Executive Director of UKHospitality Cymru, said:
'The Welsh Government claims it recognises the 'unique challenges' faced by bricks and mortar businesses, yet it has simply ignored and overlooked hospitality as one of the sectors most impacted long-term by the broken business rates system.
'These plans would see bills dramatically hiked, by the tens of thousands for many, and force businesses to reduce their hours, cut jobs and see many close for good – all of which would be a direct consequence of the Welsh Government's actions.
'It will make Wales a significantly worse place to do business and see investment in hospitality diverted to the other side of the border to England.
'It is a fact that hospitality businesses pay three times more than their fair share in business rates – something that the UK Government has recognised and is addressing in its own business rates reform.
'I urge the Welsh Government to recognise the catastrophic damage these proposals would wreak and take them back to the drawing board for wholesale revision. Reduce rates across the hospitality sector and let us continue to rebuild, serve our communities, create jobs for local people and play a key role in fostering economic growth.'
The consultation runs until August 12 2025.
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