1/2024: Confirmation of business rates multipliers and relief information
Published 14 February 2024
Applies to England
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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: 14 February 2024
Business Rates Information Letter (1/2024): Confirmation of business rates multipliers and relief information
This is the first business rates information letter to be issued by the Department for Levelling Up, Housing and Communities in 2024.
See previous letters and archived letters.
This letter covers:
- Confirmation of the non-domestic rating multipliers for 2024/2025
- Small business multiplier threshold
- Transitional relief – inflation calculations
- Rural rate relief
1. Confirmation of the non-domestic rating multipliers for 2024/2025
1. The Chancellor announced at Autumn Budget 2023 that the government would freeze the small business multiplier at 49.9p while uprating the standard multiplier by CPI inflation. Subject to the will of Parliament, the Local Government Finance Act 1988 (Calculation of Small Business Non-Domestic Rating Multiplier) (England) Regulations 2023 will give effect to this policy.
2. In accordance with Schedule 7, Part A1, paragraph A7 of the Local Government Finance Act 1988 (the 1988 Act), the Secretary of State has calculated the non-domestic rating multipliers for England for 2024/2025. In line with the requirements of paragraph A7, this business rates information letter provides details on the non-domestic rating multiplier and the small business non-domestic rating multiplier for England for 2024/2025:
a. Non-domestic rating multiplier 54.6p (0.546)
b. Small business non-domestic rating multiplier 49.9p (0.499)
2. Small business multiplier threshold
4. The government has made the Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2023 which continues and extends existing government policy. Properties with a rateable value below £51,000 are to be charged the lower small business multiplier. This instrument continues that policy and applies it to properties occupied by charities and unoccupied properties which are eligible for the small business multiplier.
5. Business rates in respect of properties in England which are below £51,000 rateable value should therefore be calculated by reference to the small business multiplier.
3. Transitional relief – inflation calculations
7. For properties within transitional relief the annual caps are indexed each year by the factor Q. For 2024/2025 and 2025/2026 Q is calculated in the regulations as a factor representing the percentage change in the Small Business Multiplier (i.e., SB multiplier year in question divided by SB multiplier for previous year). This is in regulation 10(7)(b) of the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2022. It is for billing authorities to calculate Q, but it should be clear that for 2024/25 that factor is 1.
8. In some general communication material for the revaluation and transitional relief the department used the phrase “plus inflation” to capture the underlying intention to index the caps. It is common for us to use in our communications shorthand such as this to describe complex provisions such as the transitional relief scheme. Billing authorities should however be calculating bills having regard to the regulations and not general communications issued by the department.
4. Rural rate relief
9. Government policy has been to provide 100% relief to certain rural properties which provide vital services to small local communities, such as general stores and post offices. Legislation previously provided for a statutory relief of 50% with the other 50% of relief being delivered via a discretionary relief scheme.
10. The Non-Domestic Rating Act 2023 has simplified delivery of rural rate relief such that, from 1 April 2024, 100% of the relief will be statutory. The wording amended by regulation 9(2) of the Non-Domestic Rating (Consequential and Other Amendments etc.) (England) Regulations 2023 adds “full relief” and removes the reference to discretion, therefore, the department suggests the following wording for business rates bills:
a. Certain types of properties in a rural settlement with a population below 3,000 may be entitled to full relief. The property must be the only general store, the only post office or a food shop and have a rateable value of less than £8,500, or the only public house or the only petrol station and have a rateable value of less than £12,500. The property must be occupied.
b. Full details can be obtained from the local authority.