Chancellor Rachel Reeves’ assertion that her Autumn Budget delivers the “lowest tax rates since 1991” for more than 750,000 retail, hospitality and leisure properties has come under heavy scrutiny, with business-rates experts warning that the headline claim fails to reflect the reality facing most high-street premises.
Reeves told the Commons that the Budget would introduce “the lowest tax rates since 1991”, using the phrase “tax rates” in the plural. However, detailed analysis shows that only a narrow subset of properties will benefit from the 38.2p multiplier highlighted in her speech, and many businesses will instead face some of the highest effective tax rates ever applied.
The Chancellor’s comparison relies on the new 38.2p multiplier available for retail, hospitality and leisure premises with a rateable value between £12,000 and £51,000. Yet Treasury documents reveal that many of those properties will pay an additional 1p supplement if they do not receive transitional relief. That pushes the real rate to 39.2p, rather than the headline figure.
For larger high-street premises the tax rates rise sharply. Properties valued between £51,000 and £500,000 will be taxed at 43p — or 44p with the supplement — a level far from anything seen in the early 1990s. Above £500,000, businesses will face a hefty 50.8p rate, increasing to 51.8p with the supplement, among the highest business rates multipliers ever applied and more than a dozen pence higher than the national rate in 1991/92. Smaller properties below £12,000, meanwhile, already pay no business rates through Small Business Rate Relief, making the historical comparison irrelevant.
The gap between the Chancellor’s rhetoric and the underlying figures grows further when examining overall support for the high street. According to analysis by global tax firm Ryan, the total value of government support for retail, hospitality and leisure businesses will fall by £420 million next year.
Today’s 40 per cent discount for the sector — capped at £110,000 per business — costs the Exchequer £1.385 billion. From April 2026 it will be scrapped and replaced with a system under which RHL multipliers are set 5p below the standard rate. That change will be financed by a new 2.8p surtax on properties above £500,000 in rateable value. The surtax is expected to raise £965 million in 2026/27, resulting in a 30 per cent drop in sector-wide support compared with the current scheme.
Alex Probyn, Practice Leader for Europe & Asia-Pacific Property Tax at Ryan, said the government’s messaging risks misleading businesses. He warned that many high-street premises will end up paying higher tax rates than at any point in the early 1990s, with some facing the steepest rates ever imposed. When account is taken of the reduced level of support available, he said, the headline claim bears little resemblance to the fiscal reality confronting shops, pubs and restaurants.
Instead of a long-awaited reprieve, the new regime offers a mixed — and in many cases harsher — landscape for high-street traders. While a limited number of small properties will benefit from the touted 38.2p multiplier, thousands of others will pay significantly more, and the overall package results in a substantial reduction in support for retail, hospitality and leisure firms.
Despite the Chancellor’s framing, the government’s own figures suggest that the high street now faces a more challenging tax environment than Reeves’ Budget message implied.
