The Government has published its interim response to the Transforming Business Rates Discussion Paper. While positioned as a “direction of travel” rather than a final set of measures, the report offers useful indications ahead of the Autumn Budget on 26 November 2025 and the 2026 revaluation.
Key Points from the Response
Revaluations
The Government has confirmed that the three-year (triennial) revaluation cycle will remain in place. This reflects the balance recently introduced between ensuring rateable values remain up to date and allowing businesses the certainty needed for longer-term planning.
Improvement Relief
Launched in April 2024, Improvement Relief currently provides a 12-month exemption from higher liabilities following qualifying works. Uptake of the scheme has reportedly been very low, leaving it at risk of failing to meet its policy objective of incentivising investment. While the response acknowledges that further analysis is needed, the relief may ultimately require a more fundamental overhaul if it is to achieve more than ‘window dressing’.
Empty Property Relief
The report acknowledges ongoing discussion around Empty Property Relief, recognising its importance for landlords managing vacant space. However, it was not specifically included in the “Next Steps” section, suggesting any changes may be considered over a longer timeframe.
Revenue Neutrality
The principle of revenue neutrality — that reforms should not reduce overall business rates receipts — has been reaffirmed. This means there is an intention for any new reliefs or reductions to be balanced by changes elsewhere in the system.
Looking Ahead
- Autumn Budget 2025 (26 November): Expected announcements on transitional relief, permanent Retail, Hospitality and Leisure multipliers, and the new high-value multiplier. Ministers have also indicated that decisions on Improvement Relief, Empty Property Relief and Small Business Rates Relief may be included.
- 2026 Revaluation: The next revaluation will take place against this policy backdrop. With the closure of the CCA ’23 list approaching, early preparation will be key.
- Slice vs Slab system: The report notes ongoing debate about moving from the current ‘slab’ system (a single multiplier applied to the full Rateable Value) to a potential ‘slice’ system (marginal tax rates, similar to income tax bands). While no immediate changes have been announced, this remains an area of interest in wider reform discussions.
- Longer-term reforms: Technical changes, such as updates to the Receipts & Expenditure methodology, are scheduled for further consideration ahead of the 2029 revaluation.
Our View
The interim response emphasises continuity and stability, while leaving open the possibility of further changes to key reliefs later in the year. For landlords, occupiers and investors, the focus now turns to the Autumn Budget, which will provide greater clarity on how the system will evolve.
With the 2026 revaluation on the horizon, it is important to start preparing now. Reviewing draft list positions, understanding potential liabilities, and engaging with an experienced agent early can help ensure businesses are well-placed to respond to the forthcoming changes.