The Welsh Government has launched a formal consultation on proposals to reform the non-domestic (business) rates system by introducing differential multipliers – a move that could significantly impact businesses with commercial property interests in Wales.
These changes, outlined in the latest consultation paper titled “Consultation on proposals for non-domestic rates differential multipliers”, follow new powers granted under the Local Government Finance (Wales) Act 2024, which allow for the introduction of different multipliers based on rateable value (RV). If adopted, the proposed reforms would take effect from 1 April 2026.
Currently, a single uniform multiplier is applied to all non-domestic properties in Wales, regardless of size or use. This contrasts with England and Scotland, where small businesses and large occupiers are charged different multipliers, and with Northern Ireland, where local authorities set their own regional multipliers.
Key Proposals for Businesses and SMEs
- Lower Multiplier for Small Retailers (RV below £51,000)
The Welsh Government is proposing a reduced multiplier for smaller retail properties—including shops, kiosks, and post offices—with a rateable value below £51,000. This is designed to offer relief to SMEs and rebalance the system in favour of high-street businesses, which often face higher fixed costs than online retailers.
Around 13,000 retail properties not currently receiving Small Business Rate Relief could benefit from this change, in addition to the 50,000 already in receipt of relief. Notably, larger retail premises such as supermarkets, department stores, and hypermarkets would be excluded from the scheme.
The consultation paper acknowledges that other options—such as an online sales tax—are outside the scope of devolved powers and therefore not being considered at this stage.
- Higher Multiplier for High-Value Properties (RV above £100,000)
To offset the cost of the retail multiplier, the Welsh Government is considering the introduction of a higher multiplier for properties with a rateable value above £100,000. This would impact approximately 3,200 properties, representing just 2.5% of the Welsh business rates tax base.
However, the proposal excludes specific property types occupied by public sector and publicly funded organisations—such as hospitals and schools—where they are clearly described in the local rating list. More generic property categories, such as office space used by public services, would not be excluded.
If implemented, this would create a three-tiered multiplier system:
- Standard Multiplier (for most properties)
- Retail Multiplier (for small retail properties under £51,000 RV)
- Higher Multiplier (for properties over £100,000 RV)
Timeline and Next Steps
Subject to the outcome of the consultation, differential multipliers could be introduced from 1 April 2026. Final multiplier levels will be confirmed in the Welsh Government’s 2026–2027 budget, expected at the end of 2025. These changes will align with the next business rates revaluation, also scheduled to take effect from 1 April 2026.
The consultation is open until 12 August 2025, and responses can be submitted via the Welsh Government’s website.
If you would prefer to contribute through a coordinated industry response, please contact us directly – we are compiling feedback from business ratepayers and would be happy to include your views. Send any comments to aaron.mcleod@dunlopheywood.com
What This Means for You
For businesses operating across the UK, these reforms will create further complexity in the management of business rates, adding a new dimension to property cost planning in Wales. SMEs, in particular, may benefit from the new retail multiplier, while larger occupiers should consider the potential impact of higher charges on premium premises.
Now is the time to review your property portfolio and understand how these proposed changes could affect your business from 2026 onwards. Contact info@dunlopheywood.com