Posted: Wed 28th Feb 2024

Welsh Government budget: No rise in business rate support

News and Info from Deeside, Flintshire, North Wales

The Finance Minister has defended the Welsh Government’s decision not to increase business rate support in line with England, noting it was a ‘tough choice’ but has meant the NHS has more money.

As previously reported the final Welsh Government budget has been published, however there is no movement on the business rates relief – where entities in Wales are set to get 40% discount, however across the border in England that sum is 75%.

The difference in support has been highlighted across Wales, in the Senedd and locally by Wrexham businesses,  with calls for parity at the 75% level.

The final budget has no change the to Welsh Government policy, with Finance Minister Rebecca Evans challenged on the issue, and given a specific anecdote that failing to increase to 75% would be the ‘tipping point’ and ‘might prove devastating’ to a small business.

The Minister said, “For background for anybody who’s not familiar with this, we’ve been providing temporary rate relief support for businesses in the retail hospitality and leisure sector since the pandemic. We’ve provided over a billion pounds of support

“That support was always intended to be temporary. It’s not something that business would have been planning on at all for the next financial year because it was assumed it would come to an end in any case.

“We have made some really, really difficult choices with the budget and our priority has been protecting public services – the NHS in Wales will have a 4% uplift compared to less than 1% across the border in England.

“I think the situation you’ve described gives us an example of one of the tough choices that we’ve had to make.

“Nonetheless, we will be providing 40% rates relief to those businesses in that sector.

“But, let’s remember around half of businesses in Wales pay no rates whatsoever. In any case, only around one in five will actually pay their full entitlements because we do have a really generous system of support for businesses.

“It’s worth in the next financial year, around a third of a billion pounds. That’s an awful lot of great relief support were providing.

“I do understand that this decision not to be able to provide a full 75% will be disappointing to businesses, but it is one of the tough choices that we’ve made in terms of just making sure that the NHS has what it needs to keep going.”

In a separate statement, the Minister detailed, “I am providing a package of non-domestic rates support which will benefit every ratepayer in Wales. I confirmed this package as part of the Draft Budget. We will cap the increase to the non-domestic rates multiplier for 2024-25 to 5%, at a recurring annual cost of £18m. This is lower than the 6.7% increase that would otherwise apply. We will also be investing an additional £78m to provide a fifth successive year of support for retail, leisure and hospitality businesses with their non-domestic rates bills. We also continue to support ratepayers with increased liabilities following the 2023 non-domestic rates revaluation. Our transitional relief scheme continues to phase in changes for eligible ratepayers at a cost of £38m in 2024‑25. This is in addition to our permanent rate relief schemes.”

 

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