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Posted: Thu 21st Dec 2023
The 75% business rates relief for hospitality, retail and leisure businesses in Wales will be reduced to 40% from April next year, the Welsh government has said.
Announcing its £21bn 2024/25 draft budget, Welsh Labour said it will cap the increase in the business rates standard multiplier to 5% for 2024/25 instead of it rising in line with the Consumer Price Index to benefit firms who do not get full relief.
However, on the 75% discount, that was introduced during the coronavirus pandemic, the government said it was "never intended to continue indefinitely" and it will be cut to 40% next April.
The relief applies to firms with a rateable value up to £110,000. In England, the relief will remain at 75% until 2025 after it was extended in the UK government’s Autumn Statement. In its Budget announcement, the Scottish government refused to introduce a similar scheme despite pressure from business groups.
The reduction in the business rates relief comes as the Welsh government attempts to tackle the struggling NHS by diverting more funding to health services.
All other departments will see a cut in funding including a reduction of £16m for tourism, culture and sport which could lead to currently free museums in Wales having to charge for entry.
Finance minister Rebecca Evans said:
"We have had to take some really difficult decisions to radically redesign our spending plans to focus funding on the services which matter most to the people of Wales".
David Chapman, executive directive at UKHospitality Cymru, said:
“I’m pleased that the Welsh government has heard the concerns from UKHospitality Cymru and taken the decision to continue some form of business rates relief.
“While we appreciate the economic pressures the Welsh government is under, there will be concern from businesses that relief has been reduced to 40%, from 75%, and that business rates will be increased across the board by 5%.
“It must be remembered that hospitality businesses already pay more than their fair share of business rates because the current system is out-of-date and punitive for bricks and mortar businesses.
“Small businesses, in particular, will feel hard done by as their counterparts will see rates frozen across the border. A typical local pub or restaurant in Wales will, for example, be paying £6,400 more than one in England.”
