Businesses set to reclaim £1.8bn in rates appeals as tax overhaul bites
Businesses are expected to claw back around £1.8bn in business rates payments through appeals, according to government modelling.
The figures, disclosed under the Freedom of Information Act to tax firm Ryan, suggest the Treasury expects a sizeable volume of successful challenges to new rateable values when the latest business rates lists come into force in April.
That comes as many firms brace for higher bills under the 2026 revaluation, despite a cut to the multiplier used to calculate rates.
The new modelling shows ministers have forecast a £3.59bn reduction in total rateable value as a result of successful appeals against the 2026 local ratings lists.
That would translate into roughly £1.8bn being handed back to firms.
Businesses can challenge their assessments through the check, challenge and appeal process if they believe their valuation is wrong.
But, the figures also highlight a familiar frustration for firms: while the Treasury is already assuming a large correction, those refunds may take years to come through.
Ryan said the data indicates only eight per cent of the projected corrections are expected to land in the 2026-27 financial year, rising to 13 per cent the following year.
Alex Probyn, principal and practice leader at Ryan, said: “If a large proportion of adjustment is forecast to fall into the next rating cycle, then that has implications for certainty and planning.”
“Business rates liabilities feed directly into investment and capital expenditure decisions. Timely resolution matters.”
Pressure mounts for Reeves
The figures land as business rates once again under pressure as a policy issue.
A range of sectors are warning that revaluations based on 2024 property data will still push up bills, even with changes to multipliers and transitional support.
High street businesses have been among the loudest critics. Recent analysis has suggested convenience stores and newsagents will face sharp rises over the next two years, while retail and hospitality groups have warned that the rollback of Covid-era reliefs will leave many premises paying materially more from April.
Pubs have secured extra support, including a 15 per cent discount on business rates bills from next month, after a backlash from the sector and a wider campaign over rising costs
But that relief has not been extended across the wider high street, leaving other retailers, hotels and restaurants still facing steep increases.
The government has already set aside a £4.3bn package to soften the transition as reliefs are phased out and multipliers adjusted.
A separate £3.2bn transitional relief scheme is meant to cap annual increases for businesses hit hardest by the revaluation.
But the appeal figures suggest another pressure point is already embedded in the system, with the Treasury effectively budgeting for a large number of businesses to argue that their new valuations are too high.
Probyn said: “The allowance for correction is already built into fiscal planning. Earlier resolution would not alter that; it would provide clarity sooner.”
“If the objective is to align the system with growth and investment, the speed of outcomes under CCA is an important consideration.”
Business rates remain one of the biggest fixed costs for many firms, particularly those with large property footprints.
Delays in resolving appeals can leave companies carrying higher-than-expected bills for long periods, affecting investment plans and cash flow.
The government is currently consulting on the future of business rates through a wider call for evidence, as ministers come under increasing pressure to show the system can support growth rather than choke it off.