Chancellor Rachel Reeves’ claim that the Autumn Budget sets the “lowest rates since 1991” for more than 750,000 retail, hospitality and leisure properties has been called into question after a detailed analysis found that most high street locations will actually face significantly higher business rates next year.
Reeves told MPs that she was introducing the lowest tax rates in over three decades, using the term “tax rates” in the plural. However, the claim depends entirely on a new multiplier of 38.2p for retail, hospitality and leisure (RHL) properties with a rateable value between £12,000 and £51,000 – and even that headline figure does not reflect what many properties will actually pay in practice.
Treasury documents confirm that all RHL properties not receiving transition relief will also face a 1p surcharge, increasing the effective rate for thousands of small sites to 39.2p instead of the 38.2p mentioned in the Chancellor’s statement.
For medium-sized high street properties with a rateable value between £51,000 and £500,000, the business rate multiplier is 43p or 44p with surcharge – a level well above 1991 levels. Large properties with a taxable value of more than £500,000 face the biggest increase, with a multiplier of 50.8p, rising to 51.8p after the surcharge is applied.
These tariffs are among the highest ever charged and are more than 12p higher than the national tariff of 38.6p that applied in 1991/92. Meanwhile, most RHL properties with a rateable value under £12,000 already pay no business tax due to small business rates relief, meaning the Chancellor’s comparison to 1991 is irrelevant to them.
The analysis, carried out by global tax firm Ryan, also shows that overall support for high streets will fall by £420 million next year, contradicting the impression given in the Budget speech.
The current 40 per cent RHL discount, capped at £110,000 per company, will cost the exchequer £1.385 billion in 2025/26. From April 2026 it will be replaced by a new structure where RHL multipliers will be 5p below the standard rate, funded by a new 2.8p additional tax on high-value properties with a rateable value of over £500,000.
This top tax is expected to raise £965m in 2026/27 – a reduction of £420m compared to the support provided by the existing rebate.
Alex Probyn, property tax practice leader in Europe and Asia Pacific at Ryan, said the government’s message did not reflect the real impact on high street stores. “A large number of properties will pay far higher tax rates than they did in the early 1990s, and many now face the highest rates ever applied,” he said. “If you look at the overall funding framework, support for retail stores will fall by £420 million next year. The headline figure simply doesn’t reflect fiscal reality.”
While some small RHL properties will see a lower multiple, the majority will not benefit from rates similar to 1991 levels. Most will pay significantly more, and overall government support for the sector is decreasing rather than increasing. The result, according to the analysis, is a system that cuts rates for a small group of businesses and increases them for many others – seriously challenging the Chancellor’s main demand.
