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In the Autumn Statement of December 2020, the Chancellor announced that the small business multiplier for the 2021/22 rate year, which commences on 1 April 2021, would be frozen at the same level as for 2020/21, which is 49.9 pence.
The Government has now published The Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2021, which confirms this freeze. The current small business multiplier is 49.9 pence and this will apply next year also. This multiplier applies to properties in England with a rateable value of less than £51,000. For larger properties (rateable value £51,000 or more) the current multiplier is 51.2 pence, the difference between this figure and the multiplier for smaller properties being a supplement of 1.3 pence levied on larger properties to pay for the costs of small business rate relief. the Explanatory Memorandum to the Order explains that this supplement is to continue at the same level in 2021/22, so the multiplier for larger properties in England will also remain frozen for 2021/22 at 51.2 pence.
The business rate multipliers in Scotland and Wales are matters for the devolved administrations there. Scottish Government has now confirmed that it will freeze the multiplier for 2021/22 at its current level, which is 49.0 pence, with a supplement of 2.6 pence for properties with a rateable value of £51,000 or more.
The Welsh Assembly Government has published The Non-Domestic Rating (Multiplier) (Wales) Order 2021 which freezes the Uniform Business Rates multiplier in Wales for 2021/22 at its current level, which is 53.5 pence. So the multipliers in Scotland and Wales will be frozen, in the same way as in England.
The freeze will appear ridiculous to ratepayers who are already labouring under the highest levels of recurrent property taxes of any OECD country, together with the devastating effects of the COVID-19 pandemic. Cancelling an increase will be nowhere near enough to deal with the unaffordability of business rates in the UK. Two things are needed from Government to deal with this. The first is an across the board revision of rateable values to reflect the effects of the pandemic, which have been catastrophic for some properties, and which will not have “gone away” by 1 April 2021. The second action needed is for Government to bring business rates back to a level that makes sense in relation to other corporate taxes, and in relation to property taxes in competing economies. This could be done as part of the Government’s “Fundamental Review of Business Rates”, which took evidence last year but has, to date, published no findings or recommendations.
