£116m support package unveiled as Wales updates business rates system

Businesses across Wales facing increased non-domestic rates bills from next April will receive transitional support under a new £116 million package announced by the Welsh Government.

The funding accompanies the 2026 revaluation of business rates, which will update liabilities to reflect current property values.

Ministers say the shift — the first undertaken under Wales’ new three-year revaluation cycle — will result in many firms seeing their bills fall, although others will face increases.

To soften the impact, any business whose bill rises by more than £300 as a result of the revaluation will have the increase phased in over two years.

Eligible ratepayers will pay 33% of their additional liability in 2026-27, rising to 66% in 2027-28, before paying the full amount from 2028-29.

Finance and Welsh Language Cabinet Secretary Mark Drakeford said the measures were designed to give businesses time to adjust during a period of economic uncertainty.

“We know businesses have faced significant economic challenges in recent years,” he said. “This support package will help them manage the transition to updated rates bills while we deliver on our commitment to a fairer rates system.”

In a significant change, the standard rates multiplier will fall for the first time since 2010. A new, lower multiplier for small and medium-sized retail premises will also be introduced, cutting bills for high street shops by around £20 million.

Ministers argue the reforms, alongside more frequent revaluations, will better align business rates with the realities of today’s economy.

Rates relief

The Welsh Government already provides around £250 million a year in permanent business rates relief, with roughly two-thirds of properties paying no rates at all or receiving some form of support.

The revaluation itself does not raise any additional revenue but redistributes the overall tax burden across ratepayers according to updated rental values.

The largest properties by value will pay a slightly higher multiplier of 0.515, just above the new standard rate of 0.502. The retail multiplier will be set at 0.350.

The Welsh Government says the transitional relief scheme — fully funded by ministers and with no impact on local authority finances — will prevent sudden hikes in bills and give firms certainty as they plan for the future.

Responding to the announcement, Joshua Miles, Head of Federation of Small Businesses Wales, said:
“Today’s announcement is an important step forward for independent retailers across Wales. FSB Wales has long argued for permanently lower rates for smaller businesses and these measures will limit the impact for those facing big bill increases.

“FSB Wales welcomes this targeted relief, especially the lower rate for independent retailers, but we are very disappointed that leisure and hospitality businesses, which have been among the hardest hit in recent years, have not been explicitly mentioned and given similar dedicated support.”

FSB Wales is calling on Welsh Government to use the final budget in January 2026 to confirm continued or enhanced rates relief for the hospitality and leisure sector, which has faced years of rising energy bills, staffing shortages and fragile consumer confidence.

“We urge Welsh Government to build on this momentum in the final budget next month by addressing broader cost challenges, including targeted rates relief for the hospitality and leisure sector, to ensure our independent businesses on our high streets can truly get the support they need across Wales,” concluded Miles.

Draft regulations setting out the details of the new multipliers and transitional arrangements will be laid before the Senedd in early 2026.