Convenience retailers in Wales are set for significant changes to business rates from 1 April 2026, after the Welsh government confirmed a package of measures aimed at softening the impact of the next business rates revaluation ā including a new lower retail multiplier designed to cut bills for small to medium-sized shops.
In its Final Budget 2026-27, published on 20 January, the Welsh government said it will deliver a Ā£116m business rates support package over two years to help firms manage the revaluation through a transitional relief scheme. The revaluation comes into force on 1 April 2026.
As part of the support package, the government will provide transitional relief for all ratepayers whose liability increases by more than Ā£300 following revaluation. Those increases will be phased in over two years, with eligible ratepayers paying 33% of the additional liability in year one and 66% in year two, before reaching the full bill in year three.
The Welsh government said the Ā£116m funding will fully support the scheme and apply across the tax base āin a consistent and straightforward mannerā.
Retail multiplier set at 0.350
In a move likely to be welcomed by the convenience sector, the Final Budget report confirmed a lower retail multiplier that aims to āre-balanceā the rates system in favour of small to medium-sized retail shops.
For 2026-27, the retail multiplier will be set at 0.350, which the government said will reduce business rates bills for eligible ratepayers by around Ā£20m.
Alongside this, the standard multiplier will fall sharply to 0.502 for 2026-27 - which the Welsh government described as the first reduction of the multiplier in Wales since 2010.
A new higher multiplier of 0.515 will also be introduced, applying a marginal supplement to the largest properties to help offset the revenue forgone through the retail multiplier.
The Welsh government said the business rates budget distribution for 2026-27 has reduced due to the transitional relief scheme, but stressed that local authority funding will be protected, with the reduction offset by higher Revenue Support Grant (RSG) funding so councilsā overall budgets are unaffected.
Budget: Ā£27.5bn for 2026-27
The Final Budget totals Ā£27.5bn for 2026-27, providing Ā£1.2bn more for people, public services and businesses than the current year, including Ā£400m of new allocations since the Draft Budget was published in October.
Key allocations include:
- Ā£112.8m additional funding for local government, with all councils receiving increases of 4% or above
- Ā£180m additional for health and social care, taking the revenue budget to more than Ā£12.6bn
- The Ā£116m package of business rates support over two years
āThis Final Budget provides extra resources to support the services Wales relies on,ā Finance Secretary Mark Drakeford said.
āEvery department has been protected with at least the same funding in real terms as this year, including extra funding for inflation and pay ā recognising the vital work of our public service workforce.ā
Pubs support in England being monitored
The report also referenced the UK governmentās intention to introduce additional support for pubs in England, following a change in policy from the November UK Budget. The Welsh government said it did not yet have enough detail to reflect any response in the Final Budget, but will consider whether further support is needed in Wales once the details are available.
The Welsh government added that the new package is in addition to permanent reliefs currently worth Ā£250m per year to businesses and other ratepayers.