Hundreds of thousands of high street companies will see their business rates bills rise significantly from 1 April, in many cases by more than double, due to a change in government policy advises a Vail Williams property expert.

The current 75% business rates relief (on properties up to £110,000) was introduced by the previous government to protect high street businesses from facing eye-wateringly high business rates bills in the aftermath of the Covid-19 pandemic lockdowns.

However, Business Rates expert Adam Barnfield, Partner and Head of Business Rates at commercial property consultancy Vail Williams, is highlighting that the government’s decision to slash business rates relief for retail, leisure and hospitality businesses to just 40% in last year’s Autumn Budget will mean significantly higher bills for hundreds of thousands of high street businesses from 1 April 2025.

“Having also been hit by increased costs due to high inflation, a rise in the minimum wage and employers’ national insurance contributions, hundreds of thousands of retailers including restaurants, pubs, gyms, nightclubs and other high street businesses now also face big hikes in their business rates bills from 1 April – many of which will be more than double compared to their liabilities this year. This is a significant burden for traders to shoulder, with many experts now forecasting a rise in the number of store closures in 2025 compared to previous years,” said Adam.

Record growth in companies seeking business rates support

“The Chancellor’s decision to cut business rates relief to just 40% from 1 April this year will significantly increase business rates bills, mounting further financial pressure on high street traders – many of which are still rebuilding their finances after the shock of the pandemic and the cost-of-living crisis. As a result, our research shows there are a record number of companies that are now looking for ways in which to reduce the impact of these changes to business rates,” continued Adam.

New research by Vail Williams reveals a 90% year-on-year surge in the number of Google searches from UK businesses seeking help with minimising or understanding their business rates liabilities due to the changes coming into effect from April 2025. Google searches for help with business rates also rose to their highest number ever in January.

Business rates are likely to remain higher for longer

“While the government has promised to introduce lower multipliers on business rates for retail, hospitality and leisure businesses, these will not come into effect until 2026 – and so will bring no relief to businesses for the next financial year. On top of this, rateable values of properties are likely to rise in line with rental growth next year. This means that any savings to business rates liabilities made because of lower multipliers in 2026 could end up being reduced, or potentially even wiped out, by a rise in rateable values,” said Adam.

Businesses urged to act now on Business Rates ahead of 1 April

“While the change to Business rates relief is bad news for high street businesses, there are actions that they can take to either minimise their business rates tax liabilities or ensure they are not overpaying. With the new tax year deadline just weeks away, I would urge those that haven’t already done so to act now to avoid overpaying,” concluded Adam.