The Government has revised the business rates discounts offered to high street firms days after the Budget, after guidance issued to councils failed to take inflation into account.

Retail, hospitality and leisure businesses in England will now receive £33 million more in discounts than councils were initially told, following a correction issued last weekend and reported on Sunday 8 November.

The original guidance to councils in England set out a 5p discount in the multiplier used to calculate business rates bills. But that discount was set to be eroded by inflation, with bills due to be uprated by the 3.5% rate of inflation recorded in September.

Officials moved quickly to issue new guidance. Under the corrected figures, the discount in the national multiplier will rise from 5p to 5.2p from next April, so that it keeps its value once inflation is applied.

The corrected multipliers for 2027/28, confirmed in the Government's updated business rates information letter to councils, are a standard multiplier of 49.7p, a small business multiplier of 44.7p, a standard retail, hospitality and leisure multiplier of 44.5p and a small business retail, hospitality and leisure multiplier of 39.5p. The small business retail, hospitality and leisure rate was revised down from 39.7p to 39.5p, while the standard rate for the sector falls from 44.7p to 44.5p.

The Government told council officials that the revision ensures inflation adjustments are now applied consistently and reflects its policy intention. It did not clarify whether the original figures reflected a calculation error or an omission.

The Department for Housing, Communities and Local Government has been contacted for comment.

Alex Probyn, practice leader for property tax in Europe and Asia-Pacific at global tax firm Ryan, said the correction was welcome. He said increasing the discount protects its value against inflation and is good news for retail, hospitality and leisure businesses.

But he added that stability and certainty start with getting the published tax rates right. Businesses and advisers began planning around the figures issued on Budget Day, he said, only for those rates to change within days, and the interaction between inflation and a fixed discount was entirely foreseeable.

The correction relates to the business rates package announced by Chancellor John Healey in the Autumn Budget on 28 October. That package included an extra 20% relief for pubs, social clubs and all but the largest live music venues, taking their total relief to 35%, and an increase in small business rates relief thresholds for qualifying retail, hospitality and leisure properties to £18,000 for full relief and £21,000 for tapered relief.

Eligible retail, hospitality and leisure bills will also be frozen in real terms for two years until 31 March 2029, capped by CPI inflation in 2027/28 and 2028/29. The changes apply in England, with business rates devolved in Scotland, Wales and Northern Ireland.

For high street businesses, the corrected figures mean the discount announced at the Budget will be worth what ministers intended, rather than shrinking as bills rise with inflation. For the Government, the episode is an early test of confidence in the Budget package, coming less than two weeks after it was unveiled.