Non-domestic rates, often called business rates, are a local tax that helps fund essential public services. They apply to most non-domestic properties, including those owned by public and not-for-profit organisations, not just commercial businesses. The system currently raises over £1.1 billion annually for local government in Wales.
At present, Wales uses a single business rate multiplier for all properties. The multiplier is a key factor in calculating business rates: it’s applied to the rateable value of a property to determine the bill before any reliefs. The consultation proposes introducing differential multipliers from April 2026, similar to systems already in place in England, Scotland, and Northern Ireland.
The Welsh Government’s proposal includes a lower multiplier for small and medium-sized retail businesses, recognising the challenges faced by physical shops competing with online retailers. This lower rate would apply to shops, kiosks, and post offices with a rateable value under £51,000.
To fund this change, the Government plans to introduce a higher multiplier for properties with a rateable value above £100,000. However, this would not apply to public sector buildings or institutions mainly funded by public money. Exempt properties would include hospitals, schools, emergency services, and similar facilities.
Around 3,200 properties, about 2.5% of the total, would be affected by the higher rate. If implemented, Wales would move from one to three multipliers: the standard rate, the new lower retail rate, and the higher rate for large properties. The consultation does not specify what the new rates might be. The current multiplier for 2025/26 is 0.568.
Andrew West, Director of Business Rates at Cooke & Arkwright, commented, “Whilst I agree with the principal of a reduced multiplier for the retail sector, the numbers of properties qualifying will be substantially less than benefitted from the previous retail, leisure and hospitality relief due to the new narrow definition of ‘retail’.
It is also disappointing that the Welsh Government will stop targeting resource directly to the wider retail, leisure and hospitality sector but rather rely on larger businesses to pay an increased bill to provide for the proposed relief. This could push the rate for large properties above 60p, which is too high.
Adding a third rate makes the system more confusing, especially for businesses near the cut-off points. The current single rate is simpler and easier to understand.
The 2026 revaluation will be coming into effect from April 2026 with values being published before Christmas this year, meaning that businesses are currently unable to budget accurately.”
The consultation is open for comments until 12th August. For more details, visit the Welsh Government website: Consultation on proposals for non-domestic rates differential multipliers