Business rate changes ahead

From April 2026, many businesses may find that their business rates increase. This is as a result of the revaluation of properties for business rates purposes, and for businesses operating in the retail, hospitality and leisure (RHL) sector, the withdrawal of reliefs introduced in the Covid pandemic.

Nature of business rates

Business rates in England and Wales are charged on most non-domestic premises, including offices, shops, warehouses, factories, restaurants, pubs, hotels, guest houses and holiday lets. The amount that a business pays depends on the rateable value of their property and the business rate multiplier.

A number of reliefs are available which may reduce or eliminate the business rate bill.

Rateable value

Properties are revalued every three years for business rates purposes, and a new valuation comes into effect on 1 April 2026. The rateable value is based on what it would cost to rent the property at the valuation date. For the 2026 revaluation, the valuation date is 1 April 2024.

Businesses can check their new rateable value online.

Multipliers

Prior to 1 April 2026, there were two multipliers – a standard multiplier and a small business multiplier. The standard multiplier applies where the rateable value is £51,000 or above and the small business multiplier applies where the rateable value is below £51,000. The multipliers are expressed as pence in the pound.

For 2025/26, the standard multiplier was 55.5p (57.7p in London) and the small business multiplier was 49.9p (51.9p in London).

For 2026/27, if the value of the property is £500,000 or less and the business is not a RHL business, the multiplier is set at 48p for properties valued at £51,000 or more but less than £500,000 and at 43.2p for properties with a rateable value of less than £51,000. These are lower than for 2025/26 and will offset some of the increase in the rateable value following the revaluation.

A new lower multiplier is introduced for business in the RHL sector. The lower multiplier replaces the relief previously available to this sector. The RHL multiplier is set at 43p where the rateable value is £51,000 or more and less than £500,000 and 38.2p if the rateable value is below £51,000.

Following representations from pubs, the Government announced that pubs would benefit from an additional 15% relief on top of other reliefs to which they may also be entitled.

A rateable value of 50.8p applies to properties with a rateable value of £500,000 or more.

Different multipliers apply in the City of London.

Small business rate relief

Small business rate relief applies where the rateable value of the property is £15,000 or less. Properties with a rateable value of £12,000 or less pay no business rates. Where the rateable value is between £12,000 and £15,000, the rate of relief reduces gradually from 100% to nil.

Transitional relief

Transitional relief limits the amount by which business rates can increase as a result of a revaluation. The amount by which a bill can increase from one year to the next depends on both the property’s rateable value and whether the bill is increasing or decreasing as a result of a revaluation. The caps that apply where the bill increases in the period from 1 April 2026 to 31 March 2029 are shown in the table below.

Rateable value	2026/27	2027/28	2028/29
Up to £20,000 (£28,000 in London)	5%	10% plus inflation	25% plus inflation
£20,001 (£28,001 in London) to £100,000	15%	25% plus inflation	40% plus inflation
Over £100,000	30%	25% plus inflation	25% plus inflation

Supporting small business relief

This relief is available where the rateable value increases as a result of the 2026 revaluation and the business has lost some of its small business rate relief, rural relief, RHL relief or 2023 supporting small business relief. The relief caps the increase at the higher of £800 and the relevant percentage, which for 2026/27 is 5% where the rateable value is less than £20,000 (£28,000 in London), 15% where the rateable value is between £20,001 (£28,001 in London) and £100,000 and 30% where the rateable value is more than £100,000.

Partner note: www.gov.uk/government/news/business-rates-revaluation-2026; www.gov.uk/calculate-your-business-rates.

Disclaimer

This article is not intended to be tax advice. Each person's tax circumstances are different; therefore, we recommend that you contact us for personalized tax advice. Sam Niranjan & Co., or Sivasambu Candesamy Niranjan, will not accept any responsibility whatsoever if you make any loss as a result of relying on this article.