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WALES' FINANCE MINISTER WANTS TO CHANGE THE WAY RATES ARE CALCULATED DEPENDING ON THE SIZE OF THE BUSINESS 11:13, 21 May 2025Updated 15:07, 21 May 2025 Mark Drakeford has announced

proposals for changes to business rates in Wales. Under the plans, which people can have their say on until August, he wants to change the way rates are calculated depending on the size of

the business. Business rates are charged on most non-domestic properties like shops, offices, pubs, warehouses, factories, and holiday rental homes or guest houses. Business rates are based

on a property’s ‘"rateable value" which is calculated by the Valuation Office Agency and is an estimate of how much it would cost to rent a property for a year. The rateable value

is multiplied by the current non-domestic rates "multiplier". _For our free daily briefing on the biggest issues facing the nation sign up to the Wales Matters newsletter here_.

Following a new law being passed in 2024 the Welsh Government can introduce differential multipliers for Wales using regulations. It is now consulting on proposals to introduce a lower

multiplier for small-to-medium-sized retailers and introduce a higher multiplier for high-value properties. The exact rates will be set during the Welsh Government's budget planning for

2026-27. In his statement explaining his plan Wales' finance minister Mr Drakeford said: "The multiplier is a key determinant of the bills for individual ratepayers and, in turn,

the total amount of revenue raised from non-domestic rates to support vital public services. Article continues below "Differential multipliers provide an opportunity to permanently

re-balance relative liabilities across different parts of the tax-base without changing total revenue." The proposal is for small-to-medium-sized retail shops – those with rateable

values below £51,000 – to be changed first. He said giving them lower rates was a way to limit the challenges they are facing from online retailers. It could benefit around 13,000 retail

properties across Wales, according to the Welsh Government. "It would be intended to help re-balance the non-domestic rates system in favour of retail shops to support the ongoing

viability and sustainability of the sector," Mr Drakeford said. It also wants to introduce a higher multiplier for properties with a rateable value of more than £100,000 to make up the

money lost by helping smaller businesses. Mr Drakeford said as far as possible the higher multiplier would not be intended for properties occupied by public sector bodies or other

institutions or those in, for example, the health and education sector. Mr Drakeford said: "The first use of any new powers will highlight practical considerations which inevitably

arise in implementing innovative policy action. This relatively modest proposal will allow these matters to be identified and resolved, laying the ground for further reform in the

future." If they are pursued the proposals will come into force on April 1, 2026. The consultation, available online, is running for 12 weeks until August 12, 2025. Head of the Welsh

Retail Consortium Sara Jones said: "The Welsh Government’s proposals for business rates reform are something a mixed bag for Welsh shops. The business rate in Wales is at a 26-year high

and is the highest in Great Britain, so the move to reduce rates for the smallest shops sounds encouraging. "However, ministers need to think again about their plan to levy an even

higher business rate on medium-sized and larger shops. These are the very stores that help underpin the health and vitality of high streets across Wales and account for a large slice of

retail jobs. A higher business rate on these stores is the very antithesis of what’s needed to spur retailers’ investment in our town and city centres. Ministers need to ensure that no

retailer pays a higher business rate as a result of these changes, and ideally ensure that all stores benefit from a rates reduction." UKHospitality Cymru said proposals "simply

ignored" the severe challenges faced by hospitality businesses, who now face paying unsustainable, inflated business rates. The group called for “wholesale revision” of the plans, which

would see only the smallest retail stores benefit, to ensure hospitality venues are eligible for a lower multiplier and therefore able to benefit from lower rates bills. Executive director

David Chapman said: "The Welsh Government claims it recognises the ‘unique challenges’ faced by bricks and mortar businesses, yet it has simply ignored and overlooked hospitality as one

of the sectors most impacted long-term by the broken business rates system. "These plans would see bills dramatically hiked, by the tens of thousands for many, and force businesses to

reduce their hours, cut jobs and see many close for good – all of which would be a direct consequence of the Welsh Government’s actions. It will make Wales a significantly worse place to do

business and see investment in hospitality diverted to the other side of the border to England. "It is a fact that hospitality businesses pay three times more than their fair share in

business rates – something that the UK Government has recognised and is addressing in its own business rates reform. "I urge the Welsh Government to recognise the catastrophic damage

these proposals would wreak and take them back to the drawing board for wholesale revision. Reduce rates across the hospitality sector and let us continue to rebuild, serve our communities,

create jobs for local people and play a key role in fostering economic growth." Article continues below