Non-domestic rating lower multiplier

If you are using this scheme to provide awards of subsidy, you must inform the Subsidy Control Unit: scu@gov.wales.

Wales

Non-domestic rating lower multiplier

Paragraph A16(1)(a), (3) and (4)(a) and (c) of Schedule 7 to the Local Government Finance Act 1988 (the 1988 Act) enables the Welsh Ministers to make regulations prescribing differential multipliers, based on the rateable value and description of hereditaments on a local non-domestic rating list, and specifying their values.

The application of the lower multiplier is specified by the Non-Domestic Rating (Description of Differential Multipliers) (Wales) Regulations 2025.

The value of the lower multiplier for each chargeable financial year is specified by the Non-Domestic Rating (Value of Differential Multipliers) (Wales) Regulations 2026.

The specific policy objective of the lower multiplier is to rebalance the non-domestic rates system in recognition of the importance of eligible retail, hospitality and leisure businesses within vibrant high street and town centre economies.

The Welsh Government has a commitment to rebalance the non-domestic rates system to better support the retail, hospitality and leisure businesses which vibrant town centres depend on. This will be achieved through a lower non-domestic rates multiplier for a broad range of small to medium sized businesses which are important to thriving high streets and town centres. The support will apply to selected retail, food and drink hospitality, visitor accommodation and leisure properties.

For retailers, the total space required 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.

While the imbalance created by online retail does not apply directly to hospitality and leisure businesses, these property intensive businesses mutually complement a viable retail offer to create vibrant high street and town centre economies. Thriving town centres require a mix of complementary retail, hospitality and leisure businesses, to maintain footfall and support their ongoing sustainability. Non-domestic rates liability can be a significant financial overhead for these businesses, which the Welsh Government has committed to reducing.

Permanently re-balancing the non-domestic rates system will support eligible businesses in a manner which is proportionate to the liabilities of individual ratepayers. The specific policy objective will be directly achieved by the lower multiplier, through permanently lower non-domestic rates liabilities for beneficiaries.

Local authorities (the 22 county and county borough councils) in Wales.

The lower multiplier is applicable to hereditaments (units of non-domestic property with rating assessments) with rateable values below £51,000 and which are identified as selected retail (shops, kiosks, post offices, and pharmacies), food and drink hospitality (pubs, restaurants, cafés, bars, licensed clubs, food courts and live music venues), visitor accommodation (hotels, guest houses and hostels) or leisure (cinemas, theatres, libraries, museums and gyms) properties by their description in a local rating list. This includes 90% of the relevant property types, but intentionally excludes larger properties. The intended beneficiaries are small to medium sized businesses of the relevant types.

• Wholesale and retail trade; repair of motor vehicles and motorcycles
• Accommodation and food service activities
• Arts, entertainment and recreation

1 April 2027 to 31 March 2030.

The lower multiplier is part of the non-domestic rates system from 1 April 2027 and has no default end date. This scheme has been registered for a 3-year period and will then be extended or superseded, as appropriate.

£0 budget.

There is no budget for the lower multiplier, as the setting of all multipliers within the non-domestic rates system is intended to be revenue neutral for public authorities. The estimated total value to beneficiaries of the lower multiplier is up to £35 million per year by the end of this scheme duration. As such, the total estimated value of the impact over the duration of the scheme is up to £105 million.

Reduced non-domestic rates liabilities for hereditaments subject to the lower multiplier.

The lower multiplier is applicable to hereditaments with rateable values below £51,000 and any of the following descriptions in a local non-domestic rating list:

• bar and premises
• café and premises
• café, bar and premises
• café, shop and premises
• cinema and premises
• club and premises
• concert hall and premises
• fitness centre and premises
• food court and premises
• gallery and premises
• guest house and premises
• guest house, restaurant and premises
• gymnasium and premises
• hostel and premises
• hotel and premises
• hotel, restaurant and premises
• inn and premises
• kiosk and premises
• library and premises
• museum and premises
• museum, library and premises
• music venue and premises
• pharmacy and premises
• post office and premises
• public house and premises
• public house, hotel and premises
• public house, post office and premises
• public house, restaurant and premises
• public house, shop and premises
• restaurant and premises
• restaurant, bar and premises
• restaurant, café and premises
• restaurant, shop and premises
• shop and premises
• shop, post office and premises
• theatre and premises, or
• wine bar and premises

The value of the benefit provided by the lower multiplier is calculated based on the difference in liability associated with the individual hereditament, compared with the situation if the standard multiplier applied. The value is equivalent to a reduction in liability of around 30%, reflecting the level at which the lower multiplier is set relative to the standard multiplier. This takes account of any relief which also applies. Eligible hereditaments which already attract full relief do not receive any additional benefit from the lower multiplier.

The benefit of lower multiplier is not considered to cumulate for a ratepayer with multiple eligible hereditaments. There are no economies of scale with respect to non-domestic rates liability for ratepayers in such circumstances. Non-domestic rates liability is a fixed overhead cost which scales proportionately with the addition of each individual hereditament. As described above, the benefit to the ratepayer will be proportionate to their liability, whether for one hereditament or more. There is no cumulative advantage of reduced non-domestic rates liabilities on multiple hereditaments.

The estimated maximum benefit provided by the lower multiplier is less than £9,000 per year for each eligible hereditament by the end of this scheme duration, where the rateable value is almost £51,000 and no other relief applies.

For more information about applying for support under this scheme, please contact: LocalTaxationPolicy@gov.wales

For more information about this scheme’s compliance with the Subsidy Control Act 2022, please contact: