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Hundreds of small and medium-sized hospitality, retail and leisure businesses could see their business rates reduced by 30% under new Welsh Government plans.
The permanent reduction will apply to premises with a rateable value of less than £51,000 from April 1 next year.
The scheme covers pubs, restaurants, cafes, guest houses, gyms, cinemas and independent shops. Replaces the current 15% temporary relief scheme for food and beverage businesses.
The Welsh Government stated that the tax reduction will be funded by increasing business rates on higher value commercial properties with a rateable value over £100,000.
Prime Minister Rhun ap Iorwerth said the tax reduction is aimed at supporting local high streets.
He said: “This 30% cut in rates for pubs, cafes, gyms, hotels and so many other local favorites aims to give those businesses the confidence to invest, grow and continue serving the communities that depend on them.
“We are making the system work better for the sectors that bring our urban centers to life.”
Finance Minister Elin Jones said ministers had taken a “balanced approach” to ensure the measure was affordable while protecting overall tax revenue for public services.
Rules for the new fee structure will be voted on in the Senedd this autumn. The exact rate multipliers will be defined following the UK Government’s autumn budget.
‘A vital lifeline’
John Hurst, chairman of the Federation of Small Businesses (FSB) Wales, welcomed the rate cut, which he described as a “vital lifeline for small hospitality and leisure businesses and a welcome recognition of the intense financial pressure the sectors face”.
He described the Welsh Government’s announcement as a “major victory” for business owners and continued: “These businesses are at the heart of our communities and provide essential places for people to meet, socialize and spend time together.”
Plaid Cymru Senedd members Delyth Jewell, Lindsay Whittle and Niamh Salkeld, who represent the Blaenau Gwent Caerffili Rhymni seat, welcomed the “much-needed boost” for smaller businesses.
Whittle said: “It has been a really tough time for many local businesses so this help from the Plaid Welsh Government is a welcome boost.
“Small businesses, which are the heart of our communities, were ignored by the last Labor government. That’s why it’s fantastic to see the Plaid government helping to breathe new life into our communities.”
Ms Jewell added: “Unlike previous help, this is a permanent measure so will provide long-term security for those businesses that are eligible. This announcement follows the creation of a town center task force by the Welsh Government which will bring new ideas to breathe new life into our town centres.”
Cai Parry-Jones, Reform’s shadow finance minister, said: “It’s good to move pubs, hotels and hospitality establishments into the lower business rates multiplier.”
But he added: “Where this policy fails is that the Welsh Government is not paying for this rate cut, but is instead passing the bill to larger businesses in Wales, who employ thousands of Welsh workers.
“This will make businesses in Wales less competitive than those in England, where business rates are lower, threatening future investment and putting Welsh jobs at risk.”
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