Business leaders in Wales have warned that firms will face an extra £80m on their bills from next Spring unless business rates are frozen for the next 2024-25 financial year.
Some 15 business representative groups and industry bodies, including the Welsh Retail Consortium, CBI Wales, FSB Wales and the Wales Tourism Alliance, have written to Finance Minister Rebecca Evans, urging her not to increase the multiplier rate on business rates (currently 0.53 which is times rateable values).
They say that the business rate multiplier in Wales is at a 24-year high and a fifth higher than at the start of the previous decade. It also remains higher than anywhere else in Great Britain.
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If increased in line with current CPI inflation this could see ratepayers across Wales face an extra £80 million on their rates bills from next Spring. The Welsh Government will confirm its business rate and relief threshold regime for 2024-25 when it publishes its budget on December 19.
The letter to the minister says: “We fully recognise that the Welsh Government, like business, is facing its own costs and inflationary pressures at the present time. We welcome the support your Government has afforded our sectors over recent years with the freezing of the multiplier, and with rates support for the retail, leisure and hospitality sectors. And the forthcoming Reforming Local Government Finance Bill will hopefully address some of the challenges we face from a broken business rates system.
“Yet, after three and a half turbulent years of the pandemic and costs crunch the fact is trading conditions remain challenging, the cost of doing business remains elevated, and the near-term economic outlook is weak.
“We therefore ask that Welsh Ministers freeze the headline business rate multiplier – which is already at a 24-year high and the highest in Great Britain - in the coming financial year. This would aid firms with the costs crunch, help them keep down prices for customers, and support business investment and competitiveness.
“Our organisations have a range of ideas on how the Welsh rates system could be improved. However, we collectively believe this practical measure to freeze the business rate requires to be taken in your upcoming Welsh Budget, which would be a positive step applicable to all commercial premises, help ease the burden at this difficult time, and support our shared objective of delivering more sustainable economic growth.”
Business rates in Wales were frozen for the 2023-24 financial year by the Welsh Government. The decision was part of a package of governmental support worth more than £460m over the next two financial years to help with the effects of rising costs.
The decision taken in last year’s budget meant all businesses in Wales benefited from new rates support which included freezing the non-domestic rates multiplier (currently 0.53 which is times rateable values) for 2023-24, at a cost of more than £200m over the next two years, ensuring that there is no inflationary increase in the amount of rates businesses and other ratepayers are paying.
Signatories
The letter is signed by: Sara Jones, Welsh Retail Consortium; Debbie Bryce, West Cheshire & North Wales Chamber of Commerce; Phil Clapp, UK Cinema Association; Ben Cottam, FSB Cymru; David Chapman, UK Hospitality Cymru; Suzy Davies, Wales Tourism Alliance; Andrew Goodacre, British Independent Retailers Association; Meryl Halls, Booksellers Association; David Harries, Food and Drink Federation Cymru; Melanie Leech, British Property Federation; James Lowman, Association of Convenience Stores; Ian Price, CBI Cymru; Joanne Price, IOD Cymru; Janis Richards, Make UK.
