It’s hard to believe that it’s almost time for the reforms to business rates in England to kick in for the 2022/23 tax year.
Mind you, with energy prices soaring after Ofgem’s 54% increase to the price cap, bricks-and-mortar retailers might not see much saving.
Business rates are similar to what council tax is for homeowners, in that they have a ‘rateable value’ and a levy is collected by local authorities.
Typically, business rates are charged on non-domestic properties such as pubs, shops, offices, warehouses, and factories.
The rates are also paid by holiday rental homes or guest houses, of which there are plenty on our doorstep down here in Crediton.
Businesses like those will pay business rates to Mid-Devon District Council, with the property’s rateable value set by the Valuation Office Agency.
After changes to business rates announced in Autumn Budget 2021, what can bricks-and-mortar businesses in Devon expect to pay in 2022/23?
Business rates multiplier frozen
From 1 April 2022 until 31 March 2023, the business rates multipliers will be frozen at 49.9p and 51.2p, rather than being increased with inflation.
The business rates multiplier usually determines this yearly rise and is tied to September’s inflation rate, as measured by the Consumer Prices Index.
That would’ve led to a 3.1% increase for 2022/23, hammering many firms that are still feeling the effects of the pandemic.
This measure should ensure that “more than 90% of all retail, hospitality and leisure businesses in England would see a discount of at least half”.
Relief for hardest-hit sectors
Thousands of retail, hospitality and leisure firms in England will receive a short-term business rates reprieve in 2022/23.
Chancellor Rishi Sunak revealed a temporary 50% cut in their business rates, up to a maximum of £110,000 per business from 1 April 2022.
Up to 400,000 businesses in these sectors – including pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms – stand to benefit.
More frequent revaluations
Business properties are currently rated every five years, with the current five-year cycle ending on 31 March 2023.
From 1 April 2023, the Valuation Office Agency will adjust the rateable value of business properties every three years.
At a revaluation, all properties are given a new rateable value and the business rates multipliers are revised.
With these becoming more regular, they should better reflect changing market conditions – in theory, at least.
At Stapletons, we offer business planning advice to improve all different types and sizes of business in Devon and beyond.
With soaring inflation and the energy price crisis, managing costs within your business is going to be more important than ever this year.
Our experts can help you set budgets for the 2022/23 tax year and prepare cashflow forecasts to give you a range of scenarios to plan for.
To find out more, email us at email@example.com or call 01363 773191.