RATE ALARM: shops and leisure face hammering in post-Covid changes
By Simon Hacker | 16th January 2025
A Gloucestershire accountancy firm has warned firms across the county over incoming smallprint changes to business rates on retail, hospitality and leisure. Initiated in the Autumn Budget, the rises will kick in on April 1.
Ian Sloan, FRICS, who runs Banbury-based chartered surveyors Bankier Sloan, and also owns the Sugarswell Business Park in Moreton-in-Marsh, says many shops, hospitality and leisure firms face a nasty shock in the post in early March when upwardly revised business rate forecasts land on their desks.

Mr Sloan said: "Many business owners in retail, hospitality and leisure, including your local pub, gym, coffee shop, night club, restaurant, convenience store, will have forgotten that the 75%
business rates relief they currently receive was brought in to support them to recover from Covid."
This relief was due to end in April and the ostensible good news, he said, was that it would be continued for 2025.
However, in the autumn budget, Chancellor Rachel Reeves announced the relief would stay in place - but only at 40%.
And while there will be no change for those claiming Small Business Rates Relief (SBRR) with a rateable value below £12,000, this 35% drop in help will affect those able to claim SBRR with a rateable value between £12,000 and £15,000, as well as every other larger privately operated retail, hospitality or leisure business.
"Many rates bills will rise by thousands of pounds on April 1," he warned.
As an illustration of the change and its reality, he said a scenario is now possible where the operators of any large family-run convenience store, with a rateable value of £52,000, would see an increase in rates payable of 144 % - from £7,098 to £17,316 - while an M&S Food outlet some 50 metres down the road, will need to pay an increase of just 1.7%.

He said: "National retailers with units across the country will see very little variation in their total rates bill. The business rates multiplier will rise from 54.6p in the pound to 55.5p like all others with rateable values above £51,000, but they will still be able to claim the maximum £110,000 relief per business and they will simply spread this relief over say two or three outlets rather than the one or two most do at present!"
Having crunched the numbers from the change, Mr Sloan said that a typical shop shop with a rateable value of £25,000, currently in theory paying £25,000 x 0.499 (49.9 pence in the pound), would get a bill of £12,475. Factor in the former 75% relief and it pays £3,118.75 per year.
From April 1, the same shop will see no rise in the multiplier (as it's less than £51,000 rateable value) and in theory will again pay the £12,475 - but as a result of the government's announcement in the autumn budget will now get just 40% relief. It will therefore pay £7,485 so the shop owner will see an increase in the rates payable between 2024/25 and 2025/2026 of £4,366.25.
In the wake of these announced changes, the British Retail Consortium (BRC) has urged a 20% cut in business rates for retail properties to be made from this April, with 71 retail chief executives signing the letter to the chancellor, arguing that the sector pays a disproportionate share of business taxes relative to its economic contribution.
But with cash-strapped local authorities relying heavily on all available income from business rates to the tune of £13bn annually, any reduction would require alternative funding sources to sidestep cuts to local services.

The BRC has urged adjusting business-rate factors, such as multipliers and rateable values, to make the system "more responsive".
Tiago Veiga, CEO at Aurum Solutions, said any extension to business rates relief was welcome, but wasn't "a silver bullet".
He said: "We need to look at all the barriers to growth businesses face, not just taxation.
Proactively finding cost-saving solutions needs to be a top priority for the business community."
He added that was particularly the case for the hospitality sector, where manual processes make operations a real challenge: "Enlisting technology like automation can free up significant resources to spend on growth-generating activities and help kickstart sustainable growth."
Mark Owen, editor of Punchline-Gloucester.com said: "The implications for tapering off the rate of post-Covid rate relief on these independent and family businesses do not appear to have been thought through. Yes, we certainly have to find the funds for crucial local services, but putting the financial thumbscrews on the smaller cogs which keep our county's economy running, surely that risks slaying the goose for what golden egg it's still able to produce?
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