According to the Autumn Budget 2021, business rates in England are due to be frozen until 2023, with business rate discounts available for commercial properties in certain sectors.
Detailed guidance has yet to be published, but let’s take a look at some of the measures announced by Chancellor Rishi Sunak to relieve the financial burden of the pandemic for businesses.
Business rates 2022-2023
For another year, the government is going to freeze business rates multipliers at the current levels. The standard rate will remain at 51.2p and the small business rate will remain at 49.9p until 2023.
These multipliers will be used to calculate business rate bills for commercial properties below £51,000 in value, which are likely to be ineligible for other small business relief.
They will also introduce temporary business rate relief
for 2022-2023. Eligible retail, hospitality, and leisure businesses can get a 50% discount on business rates, up to a cap of £110,000 per business.
This is less than the 66% retail discount for 2021-2022, but it will still be helpful for medium businesses who can’t get small business rates (for property values between £12,001-£15,000).
Transitional relief will also prevent business rates from fluctuating too much for the next year. Rates can’t increase after revaluation by more than 15% for small businesses (up to £20,000) or 25% for medium businesses (up to £100,000) – subject to subsidy controls and London uplifts.
Tax reliefs for creative industries and charities
Museums and Galleries Exhibition Tax Relief (MGETR)
will be extended until March 2023 to support charitable companies running museum or gallery exhibitions – expenditure after this isn’t eligible.
MGETR and Theatre Tax Relief (TTR) will temporarily increase by 25% from 27th October 2021 to 31st
March 2023. Touring production tax relief will rise from 25% to 50%, and non-touring production tax relief will increase from 20% to 45%. They will reduce to 35% and 30% respectively on 1st April 2023.
Orchestra Tax Relief (OTR) will also increase from 25% to 50% from now until March 2023, reducing to 35% for the 2023-2024 tax year. All MGETR, TTR, and OTR rates will return to pre-increase 2021 levels from 1st April 2024 (decreasing back to either 25% or 20%).
From 1st April 2022, production companies can switch between Film Tax Relief (FTR) and High-End TV Tax Relief (HETR) if they change their distribution method, so they don’t lose out on tax relief.
The government plans to look into increasing safeguards for these tax relief options from 1st April 2022, to ensure that businesses aren’t abusing the system.
Long-term measures for business rates
The 2021 Autumn Budget announcements aren’t quite the radical business rate reform many were hoping for, but further measures being taken in 2023 and onwards will help in the future.
For example, the government plans to increase revaluation frequency to every three years, instead of every five years. They’re also aiming to introduce further exemptions and relief for eligible property improvements that would otherwise increase the property’s rateable value.
This includes a 100% improvement relief for twelve months. The government will outline eligibility and implementation by 2023 and review it in 2028. Most machinery upgrades won’t affect rateable value, but adding assets and amenities such as CCTV or bike sheds might.
Similarly, targeted exemptions for renewable energy
plants and machinery will apply between April 2023 and March 2035, with 100% relief for low-carbon heat networks. This means that you could get business rate exemptions when installing electric vehicle charging points or solar panels.
You can find all the current business rate relief details for English properties on the government website. Should you need assistance with business valuations or HMRC tax enquiries, please get in touch with the accounting experts at GBAC.