Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of including (a) air conditioning systems, (b) solar panels and (c) other energy-efficient installations within the scope of Improvement Relief in the context of encouraging (i) business investment and (ii) energy efficiency upgrades.

At the Autumn Budget, the government published the Transforming Business Rates Discussion Paper, which set out priority areas for reform. This paper invited industry to help co-design a fairer business rates system that supports investment and is fit for the 21st century.

This paper sought views on the efficacy of Improvement Relief, which was introduced in April 2024 and provides 12 months of relief for qualifying improvements to a property where this increases a property’s RV, including air conditioning systems.

In summer, the Government will publish an interim report that sets out a clear direction of travel for the business rates system, with further policy detail to follow at Autumn Budget 2025.

Eligible plant and machinery used in onsite renewable energy generation and storage, such as rooftop solar panels, wind turbines, and battery storage, are exempt from business rates from 1 April 2022 until 31 March 2035.