Business rates support for next year announced by Welsh Government – new multipliers and transitional relief
Those negatively affected by recent changes to their business rates valuations could see transitional relief, say Welsh Government.
The recent release of the draft Valuation Office revaluation lists has resulted in the usual increases and decreases of rateable values in Wrexham – for example some properties in Eagles Meadow eg. the former Debenhams store had a rateable value of £370k and is now £292k.
The business rates – or non domestic rates to give it the formal title – system uses a “multiplier” to work out how much actual cash companies pay on the rateable value of the commercial property.
The payable bill is calculated by multiplying a property’s rateable value by this figure, with businesses effectively paying a set number of pence for every pound of assessed value, generally speaking its around half the published figure. That multiplier figure is devolved to Welsh Government, and in theory could be any number but does generally follows inflation, so rates bills could be much higher or much lower depending what they decide.
Also, it is worth noting that Wrexham Council does not set business rates nor generally directly retain them (aside from some circumstances such as the forthcoming investment zones) as the cash gets added to the general tax-pot to redistribute downwards in the future.
Today Welsh Government have said the standard multiplier will be reduced substantially in 2026-27, to 0.502. This will be the first reduction of the multiplier in Wales since 2010.
Earlier this year, Welsh Government confirmed plans to introduce a lower retail multiplier to re-balance the non-domestic rates system in favour of small to medium sized retail shops. The new retail multiplier will be set at 0.350 for 2026-27. They say this will reduce the non-domestic rates bills of eligible ratepayers by around £20m.
A higher multiplier will levy a marginal supplement on the largest (by value) properties in the tax-base, to offset the revenue foregone through the retail multiplier and support the overall policy objective. The new higher multiplier will be set at 0.515. This is little more than one penny in the pound higher than the standard multiplier for 2026-27 and substantially lower than the current multiplier for all properties.
As well as the multiplier changes the Welsh Government say they will also provide transitional relief to all ratepayers whose liabilities will increase by more than £300 following the revaluation.
Traditionally such relief is automatically calculated and applied to business rates bills.
Any such increases will be phased in over two years. Eligible ratepayers will pay 33% of their additional liability in the first year (2026-27) and 66% in the second year (2027-28), before reaching their full liability in the third year (2028-29).
£116m will be provided over two years fully to fund this relief, supporting all areas of the tax-base in a consistent and straightforward manner.
Cabinet Secretary for Finance and Welsh Language Mark Drakeford said: “We know businesses have faced significant economic challenges in recent years. This support package will help them manage the transition to updated rates bills while we deliver on our commitment to a fairer rates system.
“By introducing more frequent revaluations and a lower rate for small shops, we’re making sure the business rates system reflects today’s economy and supports the businesses that are the backbone of our high streets and communities”
The Welsh Government note they already provide £250 million each year in permanent business rates relief. Around two thirds of all properties in Wales either pay no rates or receive some form of relief.
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