The Welsh government published its Final Budget Report for 2026-27 on 20 January 2026. This follows the publication of the Outline Draft Budget Report in October 2025 and the Detailed Draft Budget in November 2025. A debate and vote on the Final Budget will take place in the Welsh Parliament on 27 January 2026.
The Final Budget confirms that no changes will be made to the Welsh rates of income tax or to the thresholds for land transaction tax (LTT) for 2026-27. The announcements made in the Outline Draft Budget in respect of LTT are considered in more detail in an earlier article.
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Non-domestic (business) rates
A number of changes in connection with the next business rates revaluation, which is due to take effect on 1 April 2026, were confirmed in the Final Budget.
For 2025-26, a single multiplier of 0.568 applies to all in-scope properties in Wales. For 2026-27, there will be three multipliers, as follows:
- a retail multiplier of 0.350, applying to shops with a rateable value below £51,000;
- a higher multiplier of 0.515, applying to all properties with a rateable value above £100,000; and
- a standard multiplier of 0.502, applying in all other cases.
The Welsh government says that the lower retail multiplier “will re-balance the non-domestic rates system in favour of small to medium sized retail shops”, paid for in part by the higher multiplier for other properties.
Further, the Welsh government will provide transitional relief where bills rise by more than £300 as a result of the 2026 revaluation. Under the relief, which is estimated to cost £116m, an eligible ratepayer will pay an amount equivalent to 33% of what would have been their additional liability in 2026-27 and 66% in 2027-28.
ICAEW’s view
Robert Lloyd Griffiths OBE, Director – Wales, ICAEW, said “We welcome the specific support being given to Welsh high streets. Small businesses are the backbone of the Welsh economy, and their resilience and innovation are central to Wales’ long-term prosperity. Speaking with our members and business leaders across the country, it is clear that barriers to growth persist for many of them. The cost of doing business remains too high, and business rates are consistently cited as one of the pressures holding firms back.”
“The support announced in the Final Budget is encouraging, particularly the steps taken on non-domestic rates and transitional relief. However, if we are serious about unlocking Wales’ economic potential, we must be bolder in the scale and ambition of support and relief available to Welsh businesses. ICAEW members want to see a system that genuinely enables investment, growth and competitiveness.”
“It is also vital that the hospitality sector in Wales is not placed at a disadvantage compared with counterparts in England. A level playing field is essential if we are to sustain jobs, attract visitors and maintain the vibrancy of our towns and communities.”
“We look forward to working with the Welsh Government to ensure that future reforms go further in supporting the businesses that drive Wales’ economy forward.”
Business rates in England
The UK government is currently consulting on reforms to business rates in England. Further details, including how to contribute to ICAEW’s response to the consultation, are provided in an earlier article.
In previous representations, ICAEW has stressed the importance of the UK and devolved governments working together to ensure that businesses receive sufficient support through the various business rates systems across the UK.
Landfill disposals tax
In the Outline Draft Budget, it was confirmed that rates of landfill disposal tax (LDT) will increase in line with inflation. The final Budget confirms that the rates for LDT for 2026-27 will be:
- standard rate: £130.75 per tonne;
- unauthorised disposals rate: £196.15 per tonne; and
- lower rate - £8.65 per tonne.
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