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Written question asked by David Simmonds (Conservative) on Thursday, 27 November 2025, in the House of Commons. It was due for an answer on Monday, 1 December 2025. It was answered by Dan Tomlinson (Labour) on Friday, 5 December 2025 on behalf of the Treasury.

Business Rates: Tax Allowances

Question

To ask the Chancellor of the Exchequer, with reference paragraph 4.28 of the Autumn Budget 2025, HC1492, published on 26 November 2025, how many hereditaments will pay the business rate transitional supplement in 2026-27; what estimate she has made of the cost of the supplement; and for what reason the transitional relief is no longer funded by the Exchequer.

Answer

At Budget 2025, the Government announced updated property values independently assessed by the Valuation Office. Revaluations ensure that the rateable values (RVs) of properties are updated in line with market changes, and that the tax rates adjust to reflect changes in the tax base. Following growth in the tax base, all ratepayers will pay a lower tax rate than they do now.

Revenue raised from business rates is forecast to increase for a number of reasons. The tax rates change with inflation to maintain income for local authorities in real terms; the size of the tax base is forecast to increase; and temporary reliefs taper away. The Government is spending £4.3bn over the next three years on a support package, including protection for those seeing bills increase.

This includes a re-designed Transitional Relief (TR) scheme, to protect businesses from large bill increases as a result of the revaluation. This is worth £3.2 billion over the next three years and, compared to the 2023 TR scheme, provides more generous support for those paying higher tax rates (including the high-value multiplier).

To reduce the Exchequer cost the Government is introducing a 1p supplement in 2026/27 only, paid by ratepayers who do not receive TR or the Supporting Small Business scheme.

Secondary information

Type
Written question
Reference
95329
Session
2024-26
Related items
Budget 2025: Strong Foundations, Secure Future
Wednesday, 26 November 2025
House of Commons papers
House of Commons
House of Lords
Grouped for answer
Yes
Transferred
Yes
Subjects
Business rates Tax allowances
Contains statistics
Yes
Link
View this Written question on www.parliament.uk