Consultation on proposals for non-domestic rates differential multipliers

Non-domestic rates, sometimes referred to as ‘business rates’, are a local tax which help to pay for local services. Rates are charged on most non-domestic properties, including property owned or operated by the public sector and not‑for-profit organisations, not just property used for commercial purposes. Non-domestic rates contributes over £1.1 billion annually towards the funding of essential public services provided by local government in Wales. The Welsh Government is delivering a range of reforms to the non-domestic rates system during the current Senedd term. 

The multiplier is a key determinant of the non-domestic rates bills that ratepayers are required to pay. Non-domestic rates liability, prior to the application of any reliefs, is calculated by taking the rateable value of the property, as determined by the independent Valuation Office Agency, and multiplying it by the multiplier, which is set annually by the Welsh Government. In Wales, a single multiplier currently applies to all properties in the tax-base. 

Different systems of multipliers exist elsewhere in the UK. In England, a lower multiplier applies to small properties (with rateable values below £51,000) and all others are subject to the standard multiplier. From 2026 to 2027 onwards, the UK Government will introduce further lower multipliers for retail, leisure and hospitality properties and a higher multiplier for properties with ratable values of £500,000 and above. In Scotland, one of three multipliers applies based on the rateable value of a property, in the form of a basic rate (up to £51,000), an intermediate rate (£51,001 to £100,000), and a higher rate (above £100,000). In Northern Ireland, multipliers are set locally, whereby a central rate is supplemented by a rate set in each district council area.

The Local Government Finance (Wales) Act 2024 provided the Welsh Government with the ability to introduce differential multipliers for Wales using regulations. This consultation seeks views on the Welsh Government’s proposals to introduce differential multipliers from 1 April 2026.

The Welsh Government propose to introduce a lower multiplier for small to medium sized retailers. This proposal recognises the unique challenges faced by ‘bricks and mortar’ retail shops, not least through their exposure to competition from online retailers. The total space required by retail shops within the non-domestic rates tax-base is large, but each property serves a localised market. In contrast, online retailers have a relatively modest, efficient and low-cost physical footprint, in the context of the national or international scale and reach of their business (primarily reflected in the use of large distribution warehouses). 

As non-domestic rates is a tax on property, this imbalance will not be addressed naturally over time through regular revaluations of the tax-base. A lower multiplier 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. Some other potential responses to this challenge which stakeholders have proposed, such as an online sales tax, could not be considered by the Welsh Government as they do not relate to a devolved policy area.

The proposed retail multiplier would apply to properties with rateable values below £51,000 and which are identified as shops, kiosks or post offices by their description in a local rating list. This includes nearly 95% of all shops, but intentionally excludes large shops, department stores, hypermarkets and superstores. Around 13,000 properties (in addition to the 50,000 properties occupied by small businesses across Wales which already attract full relief) would benefit from a retail multiplier with the proposed scope.

The Welsh Government’s shared strategic vision for the retail sector and retail action plan recognises that a strong retail sector is integral to vibrant and sustainable high streets and town centres. This proposal would also be expected to indirectly benefit other sectors of the high street economy, through the visitor footfall supported by the maintenance of a viable retail sector. Conversely, any substantial erosion of the retail sector due to challenges to its ongoing viability may have knock-on consequences for the complementary sectors of the economy.

The Welsh Government is also considering introducing a higher multiplier for high value properties, to offset the revenue which would be forgone through the proposed retail multiplier. A higher multiplier would levy a modest amount of additional revenue from the largest (by value) properties in the tax-base (local and central rating lists). This would ensure the standard multiplier, applicable to all properties which were not subject to the retail or higher multipliers, could be set at the lowest possible level (while also ensuring there is no change to the overall amount of non-domestic rates revenue). 

It is proposed that a higher multiplier would apply to properties with a rateable value above £100,000. As far as possible, a higher multiplier would not be intended to apply to specific property types which are occupied by public sector bodies or other institutions which are largely sustained by public funding models. The following property types would be excluded from a higher multiplier based on their description in a local rating list: hospitals, surgeries, health centres, schools, colleges, universities, libraries, museums, leisure centres, cemeteries, crematoria, fire stations, ambulance stations, police stations, prisons, courts and auxiliary defence establishments. It would not be possible to exclude more generic property types, such as offices, where they are occupied by public services.

The higher multiplier would apply to around 3,200 properties (2.5% of all properties in the tax-base). This would result in three multipliers in total (the new retail and higher multipliers, in addition to the existing standard multiplier). 

Subject to consideration of the views submitted in response to this consultation, the Welsh Government intends to bring forward the regulations required to introduce differential multipliers and bring them into force on 1 April 2026. 

The Welsh Government recognises that there would be a balance to strike in the setting of any differential multipliers, particularly in relation to the implications for the levels of the standard multiplier and a higher multiplier (to maintain the same overall non-domestic rates revenue). The levels of all multipliers will be determined as part of the Welsh Government’s budget setting for 2026 to 2027, which will be set out towards the end of 2025. This will take account of the outcome of the next non-domestic rates revaluation, which will also take effect on 1 April 2026. 

Question 1 

Do you agree with the proposal to introduce a lower retail multiplier?

Question 2 

Do you think the proposed definition for a retail multiplier would align with the policy intent?

Question 3

Do you think a higher multiplier should apply to properties with a rateable value above £100,000 (subject to the described exclusions)?

Question 4

Do you think the proposed definition for a higher multiplier would align with the policy intent?

Question 5

What, in your opinion, would be the likely effects of the proposals on the Welsh language? We are particularly interested in any likely effects on opportunities to use the Welsh language and on not treating the Welsh language less favourably than English. 

1. Do you think that there are opportunities to promote any positive effects?
2. Do you think that there are opportunities to mitigate any adverse effects? 

Question 6

In your opinion, could the proposals be formulated or changed so as to:

1. have positive effects or more positive effects on using the Welsh language and on not treating the Welsh language less favourably than English; or
2. mitigate any negative effects on using the Welsh language and on not treating the Welsh language less favourably than English?

Question 7

We have asked a number of specific questions. If you have any related points which we have not specifically addressed, please use this space to record them.

Submit your comments by 12 August 2025, in any of the following ways.

• Complete our online form
• Download, complete our response form and email CTandNDR.Consultations@gov.wales
• Download, complete our response form and post it to:

Non-Domestic Rates Policy Branch
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

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Data Protection Officer

Data Protection Officer
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

Email: Data.ProtectionOfficer@gov.wales 

Information Commissioner’s Office

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WG Number: WG52232

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