Hospitality Industry and Retail Trade: Business Rates
The question
To ask the Chancellor of the Exchequer, with reference to her Department's policy paper entitled Effects of the business rates retail, hospitality and leisure multipliers and high-value multiplier, published 26 November 2025, what is the breakdown of the £270 million cost in each of (a) 2026-27, (b) 2027-28 and (c) 2028-29; and whether that analysis includes behavioural affects.
Answered by Dan Tomlinson
The Chancellor’s 2026 Budget increased the level of business rates paid by warehouses such as those used by online giants. That revenue was used to help with lower business rates for retail and hospitality businesses.
Between 2026-27 and 2028-29, the Government is expecting to raise an additional £270 million from distribution warehouses, through the new business rates high-value multiplier. This amounts to £90 million per year. The additional revenue is directly supporting over 750,000 in-person retail, hospitality and leisure properties through lower multipliers. This costing accounts for future backdated changes to the rating lists, but not for behavioural effects.
The costing for total revenue raised through the high-value multiplier, which has been certified by the independent Office for Budget Responsibility, was adjusted downwards to account for the potential impact on appeals, behavioural changes and non-compliance.
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