With the backdrop of Rates Bills being issued for 2024/25 by increasingly cash strapped councils and a gloomy economic outlook, Jeremy Hunt, this afternoon, gave his Government’s spring Budget, to a rowdy parliament.

With inflation still at twice the Bank of England’s target rate of 2% continuing to squeeze struggling households and businesses and the UK entering into a technical recession towards the end of last year (with an actual recession running for over 2 years now, when factoring in population growth), the chancellor had much work to do.

This was Jeremey Hunt’s fourth fiscal event since taking office. His first, early last year, predominantly focussed on undoing the mess created by Liz Truss and Kwasi Kwarteng’s disastrous ‘mini-budget’. Subsequent policy has followed along the same path, attempting to rebuild confidence in the Government, undermined by the previous leadership, while seeking to satisfy the electorate with targeted tax cuts. So, what for the 2024 spring Budget?

Disappointingly the 2024 spring Budget speech had no mention whatsoever of commercial property, or the level of tax paid by the owners and occupiers of business space, apart from some additional relief for the film industry.

Buried within the Budget Report however, but curiously omitted from the Budget speech, the government ‘hid’ a significant change to the rules on Empty Rates Relief. The change will no doubt be very unpopular with commercial property owners, struggling to let space, and commercial property occupiers, with surplus space.

Following the Autumn Statement and the Budget, the latest position is –

Standard Business Rates Multiplier Increases: For 2024/25 the Business Rates multiplier increases from 51.2p to 54.6p, increasing this punitive tax to its highest ever level. This will result in some significant Rates Liability increases for many occupiers, particularly larger retailers.

Small Business Rates Multiplier Remains Fixed: For occupiers of smaller properties, with Rateable Values below £51,000, the multiplier will remain at 49.9p for another year.

Empty Rates Relief: The government has extended the occupation period required to benefit from Empty Rates Relief, from 6 weeks to 13 weeks. The change is effective for occupations from 1st April. It seems incredible this is the governments answer, following consultation.

Rate Relief for Small Businesses: No change – occupiers with a single Rating Assessment below £12,001 will continue to pay no Rates, with a level of Relief applying up to £15,000 Rateable Value. This level has been fixed since 1/4/2017, despite an increase in the values of many properties, under the 2023 Revaluation.

Extension of Retail Relief: Retail, hospitality, and leisure businesses will enjoy an extension of the 75% discount on business rates, up to a cap of £110,000. This unfortunately does little to help our larger retailers. It was hoped that the cap could be removed, or increased, so it properly helps larger retailers and our High Streets.

Film Studios Relief: Eligible sites in England will receive a 40% reduction on gross business rates bills, from April 2024 until 2034.

Maughan Mitchell feel extremely disappointed that the Government has done nothing to address the growing burden of Business Rates tax, for occupiers and owners of commercial property.

Occupiers and owners will face significantly higher Business Rates Bills for 2024/25, with an increase in the Business Rates multiplier, from 51.2p to 54.6p, with Transitional Rates Relief also falling away for many businesses. This will impact properties with large Assessment increases, under the 2023 Revaluation.

The increases in tax will be felt hardest by larger retailers, who only receive Retail Relief up to the cap of £110,000, as well as manufacturing and warehousing, where the biggest valuation increases have occurred, under the 2023 Rating Revaluation.

For a closer look at the Spring Budget 2024, click here.

Contact Maughan Mitchell , for expert professional advice, if you have any questions, concerning Commercial Leases or Business Rates.