RETAIL, HOSPITALITY AND LEISURE REDUCTIONS, TAXING ONLINE GIANTS AND WHAT TO EXPECT FROM THE DRAFT RATING LIST: BUDGET 2025

Amid the leaks and speculation surrounding this week’s Budget was the news that the Government would also release the 2026 Draft Rating List, providing the commercial real estate market with advance knowledge of the impact that the upcoming Revaluation would have on their businesses.

The takeaway headline from Chancellor Rachel Reeves’ second Budget since Labour came to power in 2024 was that the government will introduce “permanently lower tax rates” for more than 750,000 Retail, Hospitality and Leisure properties, funding the change by introducing higher rates on business properties with Rateable Values of £500,000 or more – an estimated 1% of properties.

The business rates multipliers for the Retail, Hospitality and Leisure (RHL) sector have been confirmed as being positioned 5p below standard national businesses, with a small business RHL multiplier of 38.2p and a standard RHL multiplier 43p in 2026-27 – resulting in what the government claims will be the lowest tax rate since 1990-91 and 2010-11 for small and standard RHL properties respectively.

Meanwhile, the higher rate on the most valuable properties –will be set at 2.8p above the national standard multiplier of 48p, resulting in a high-value multiplier of 50.8p in 2026-27.

But Andrew Hulbert, of Harris Lamb’s Business Rates team, said that the Chancellor’s explanation that the move meant that properties such as fulfilment warehouses used by ‘online retail giants’ would be subject to the higher rate glossed over the huge impact the change would have on the commercial property market as a whole.

“Commercial premises with Rateable Values of £500,000 plus are not limited to Amazon – hundreds of businesses that fall within that bracket are not retail giants, they are schools, hospitals, offices and manufacturing sites.

“While we acknowledge that the Government could have set a larger figure in place for the high value multiplier – it has the authority to raise it by up to 10p above the national rate – that 2.8p supplement will have a significant impact on all these businesses. This move is not as straight forward as simply “taxing the big boys” as has been suggested,” said Andrew.

In addition to the revised multiplier figures, the Draft Rating List is set to cause further concern, with some Rateable Values tripling and others soaring further still.

“It is unusual to release the Draft List alongside the Budget, and with so much information to digest, both personally and commercially, it is a daunting time for business owners.

“The coming weeks will see my colleagues and I reviewing the new List and the huge fluctuation in Rateable Values it brings as we support our clients through the process.

For expert guidance, clarification and navigation around the 2026 Revaluation, contact Harris Lamb’s Business Rates team on rating@harrislamb.com.