Mark Drakeford announces plans to change business rates in Wales
Mark Drakeford announces plans to change business rates in Wales
Wales' finance minister wants to change the way rates are calculated depending on the size of the business
Mark Drakeford in his last First Minister's Questions in the chamber
(Image: Welsh Government )
Mark Drakeford has announced proposals for changes to business rates in Wales. Under the plans, which people can have their say on until August, he wants to change the way rates are calculated depending on the size of the business.
Business rates are charged on most non-domestic properties like shops, offices, pubs, warehouses, factories, and holiday rental homes or guest houses. Business rates are based on a property's '"rateable value" which is calculated by the Valuation Office Agency and is an estimate of how much it would cost to rent a property for a year.
The rateable value is multiplied by the current non-domestic rates "multiplier". For our free daily briefing on the biggest issues facing the nation sign up to the Wales Matters newsletter here.
Following a new law being passed in 2024 the Welsh Government can introduce differential multipliers for Wales using regulations.
It is now consulting on proposals to introduce a lower multiplier for small-to-medium-sized retailers and introduce a higher multiplier for high-value properties. The exact rates will be set during the Welsh Government's budget planning for 2026-27.
In his statement explaining his plan Wales' finance minister Mr Drakeford said: "The multiplier is a key determinant of the bills for individual ratepayers and, in turn, the total amount of revenue raised from non-domestic rates to support vital public services.
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"Differential multipliers provide an opportunity to permanently re-balance relative liabilities across different parts of the tax-base without changing total revenue."
The proposal is for small-to-medium-sized retail shops – those with rateable values below £51,000 – to be changed first. He said giving them lower rates was a way to limit the challenges they are facing from online retailers. It could benefit around 13,000 retail properties across Wales, according to the Welsh Government.
"It would be intended to help re-balance the non-domestic rates system in favour of retail shops to support the ongoing viability and sustainability of the sector," Mr Drakeford said.
It also wants to introduce a higher multiplier for properties with a rateable value of more than £100,000 to make up the money lost by helping smaller businesses.
Mr Drakeford said as far as possible the higher multiplier would not be intended for properties occupied by public sector bodies or other institutions or those in, for example, the health and education sector.
Mr Drakeford said: "The first use of any new powers will highlight practical considerations which inevitably arise in implementing innovative policy action. This relatively modest proposal will allow these matters to be identified and resolved, laying the ground for further reform in the future."
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If they are pursued the proposals will come into force on April 1, 2026. The consultation, available online, is running for 12 weeks until August 12, 2025.
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