Business Rates Relief Corrected: High Street Firms Get £33m More After Budget Guidance Error

The government has quietly corrected its business rates relief guidance for England, adding £33 million to the discounts that retail, hospitality and leisure (RHL) firms will receive. The change came only days after councils were given the original figures.

What changed in the business rates relief figures

The first guidance to councils set the discount for RHL businesses at 5p in the multiplier, the figure used to calculate tax bills. But it did not account for inflation. Bills are due to be uprated by September’s 3.5% inflation rate, so a discount fixed at 5p would have lost value in real terms.

Officials then issued new guidance. From next April the national multiplier discount will rise from 5p to 5.2p, which is broadly in line with the 3.5% uprating. The small business RHL multiplier has been revised from 39.7p to 39.5p, while the standard RHL multiplier falls from 44.7p to 44.5p. The result is £33 million more in discounts for high street firms than councils were first told to expect.

Error or omission? The government isn’t saying

Councils were told the revision ensures inflation adjustments are now applied consistently and reflects the government’s policy intention. The government did not explain whether the original numbers came from a calculation error or an omission. The Department for Housing, Communities and Local Government has been approached for comment.

Whatever the cause, the episode suggests the original figures did not match what ministers meant to deliver. The corrected rates restore the intended value of the relief rather than add to it.

Industry reaction: welcome, but avoidable

Alex Probyn, practice leader for property tax in Europe and Asia-Pacific at the tax firm Ryan, called the correction “welcome”. He said that raising the discount protects its value against inflation and is good news for RHL businesses.

He was also critical of how it happened. “Stability and certainty start with getting the published tax rates right,” he said. Businesses and their advisers had begun planning around the figures issued on Budget Day, only to see them change within days. Probyn argued that the interaction between inflation and a fixed discount was “entirely foreseeable” and that firms “should have been given the correct figures on Budget Day.”

Why the details matter for planning

The adjustments to the multipliers are small, a fraction of a penny. But business rates bills are calculated by applying the multiplier to a property’s rateable value, so small shifts add up across thousands of premises. That is how the correction reaches £33 million in total.

For firms, the more immediate issue is reliability. Property tax is a major fixed cost for shops, pubs, restaurants and leisure venues, and many were already budgeting for next April. Anyone who modelled their bills on the Budget Day numbers will need to update their forecasts. The corrected business rates relief works in their favour, but the lack of an explanation for the original mistake leaves open questions about how the guidance was prepared.

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