Increased Business Rates for Police Stations and NHS Hospitals
The government is implementing changes to business rates that could result in higher taxes for government buildings, such as military barracks and prisons.
An analysis suggests that the business rates reforms announced in the Budget will introduce a new levy on NHS hospitals, police stations, and universities.
Data released by Altus Group on Monday shows that hundreds of NHS and higher education properties will face increased taxes next year as a result of these changes.
The reforms aim to ease the burden on smaller high street firms and operators, following Chancellor Rachel Reeves’ announcement in the Budget statement last week.
Business rates are calculated based on a property’s rateable value multiplied by a government-set multiplier, with various reliefs available to reduce the owed amount.
From 2026, taxes will decrease for high street retailers, hospitality businesses, and leisure premises with a rateable value below £500,000, offset by a higher multiplier for properties valued at £500,000 or more.
This includes most large distribution warehouses, including those utilized by online giants like Amazon.
However, Altus Group reports that the reform will also impact properties used by 297 NHS hospitals, ten Metropolitan Police premises, and numerous universities and further education colleges.
Additionally, government departments will face higher tax bills for over 200 properties, including military barracks, court buildings, and prisons.
Altus Group’s President of property tax, Alex Probyn, criticized the Labour party’s business rates reform plan as “ill-thought-out.”
Discussing the impact on businesses, the government aims to deliver a fairer system through these reforms to protect the high street and incentivize investment for the 21st century.
The British Retail Consortium (BRC) expressed concerns about the changes, highlighting the importance of all businesses for economic growth and emphasizing the need for a balanced approach.
Other organizations, such as the CBI and the BBPA, voiced their opinions on the Budget, with mixed reactions to the announced changes.
PA Media contributed to this report.
