Business Rates 2026/2027 – What does it really mean for our small towns and high streets?

The Welsh Government has recently announced changes to Business Rates for Non-Domestic Properties for 2026/27, with Finance Secretary Mark Drakeford stating that the system is being rebalanced to support small to medium-sized retail businesses.

On paper, it sounds like good news.

Lower multipliers are being introduced, including a reduced rate of 0.350 for businesses with a rateable value under £51,000. For many small businesses, that should mean a noticeable saving.

And in some cases, it does—at least at first glance.

For example, a retail unit with a rateable value of £14,500 would see its annual bill drop from £4,941.60 in 2025/26 to £4,313.75 in 2026/27. That looks like a positive step.

But when you look more closely at what is actually happening across Caldicot Town Centre and the wider country, the reality is far less straightforward.

At the same time as these multiplier reductions are being introduced, the base rate used to calculate rateable values has increased across much of the town centre, by an average of around £25. This base rate applies to the most valuable part of a shop—typically the front trading area—and then reduces in stages further into the property.

In simple terms, while the multiplier has gone down, the underlying valuation has gone up.

The result is that the headline savings are, in many cases, being quietly reduced or offset altogether.

What makes this more concerning is how this compares to larger businesses.

Looking at a supermarket example locally, a property with a rateable value increasing from £390,000 to £432,500 actually sees its overall bill fall from £245,660 to £222,737 under the new system. Despite higher valuations and base rates, the total amount paid is significantly lower.

As a further comparison, we have reviewed a property on Clarence Place in Newport, on the outskirts of the city centre. This location benefits from significantly higher footfall, strong visibility on a main road, and even its own dedicated parking.

Despite these clear advantages, the base rate applied there is just £165.00—lower than what is currently being applied to many properties in Caldicot Town Centre.

This raises a serious question about consistency. How can a location with greater visibility, access, and commercial advantage be valued more favourably than a smaller town centre working hard to sustain its independent businesses?

From our perspective at Caldicot Town Team, presenting these changes as meaningful support for small businesses is misleading.

There is also a wider issue that cannot be ignored. Business rates are often framed as a contribution towards local services, but for many small businesses, that simply does not reflect reality. Businesses are still paying separately for refuse collection, covering their own insurance, funding cleaning and maintenance, and in many cases contributing voluntarily to the upkeep and vitality of the town centre.

For many, the question is simple—what exactly are we getting in return?

These costs are not just frustrating, they are a genuine barrier to growth. They limit the ability for businesses to expand, invest, and in some cases, even survive. At a time when high streets are already under pressure, this approach risks holding back the very businesses that keep our town centres alive.

This is not about one single decision or one single organisation. Responsibility sits across Welsh Government, local councils, and elected representatives at every level. The impact of these policies is visible on the ground, and yet the narrative continues to suggest that small businesses are being prioritised.

From where we stand, that simply isn’t the case.

Caldicot’s independent businesses are not asking for special treatment. They are asking for fairness, transparency, and a system that genuinely reflects the challenges they face. High streets are more than just places to shop—they are where communities connect, where local economies grow, and where towns like ours maintain their identity.

If the goal is to support small businesses, then the outcomes need to match the message.

Right now, they don’t.