Mark Drakeford MS, Cabinet Secretary for Finance and Welsh Language
Today, I am launching a consultation seeking views on the Welsh Government’s proposals to introduce differential multipliers for non-domestic rates.
Following the passage of the Local Government Finance (Wales) Act 2024, the Welsh Government is able to introduce differential multipliers for Wales using regulations. 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. Differential multipliers provide an opportunity to permanently re-balance relative liabilities across different parts of the tax-base, without changing total revenue.
The Welsh Government proposes to make the first use of these new powers through the introduction of a lower multiplier for small to medium sized retail shops (with rateable values below £51,000). This proposal recognises the unique challenges faced by the ‘bricks and mortar’ retail sector, not least through their exposure to competition from online retailers. 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. Our 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.
The Welsh Government is also considering introducing a higher multiplier, which would levy a modest amount of additional revenue from the largest properties in the tax-base (with rateable values over £100,000). This would help to offset the revenue which would be forgone through the proposed retail multiplier and ensure that the standard multiplier (applicable to all properties which would not be subject to the retail or higher multiplier) could be set at the lowest possible level. 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 (e.g. in the health and education sectors).
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.
Subject to the outcome of the consultation, the proposals are intended to take effect on 1 April 2026. The Welsh Government recognises that there would be a balance to strike in the setting of relative levels for any differential multipliers.
The levels of all multipliers will be determined as part of the Welsh Government’s budget setting for 2026-27. This will take account of the outcome the next non-domestic rates revaluation, which will also take effect on 1 April 2026.
The consultation sets out the Welsh Government’s proposals in detail and asks for views. It will run for 12 weeks from 20 May to 12 August 2025.