How the 2026 Business Rates Update Will Impact UK Businesses

From April 2026, many businesses across England and Wales are likely to see changes to their business rates bills. These changes are mainly due to the latest property revaluation and adjustments to relief schemes, particularly affecting the retail, hospitality and leisure (RHL) sector.

If you operate commercial premises, now is the time to understand how these updates could impact your costs and cash flow.

Understanding Business Rates

Business rates are charged on most non-domestic properties, including:

• Offices

• Shops and retail units

• Warehouses and factories

• Restaurants, pubs and cafés

• Hotels, guest houses and holiday lets

The amount you pay depends on two key factors:

1. Rateable Value of your property

2. Business Rates Multiplier set by the government

Various relief schemes are available that can reduce — or in some cases eliminate — your business rates bill.

Property Revaluation: What’s Changing in 2026?

Commercial properties are revalued every three years. The next revaluation takes effect on 1 April 2026, based on rental values as of 1 April 2024.

The rateable value reflects the estimated annual rent the property could achieve on the open market at the valuation date.

As rental markets have shifted in recent years, many businesses may see increases in their rateable value, which could result in higher bills — although multiplier adjustments may help offset some of this impact.

Businesses can check their updated rateable value online before the changes take effect.

New Business Rates Multipliers for 2026/27

Until April 2026, there were two multipliers:

• Standard multiplier (for properties with rateable value of £51,000 or more)

• Small business multiplier (for properties below £51,000)

For 2026/27, the structure changes:

 For Non-RHL Businesses (Property Value £500,000 or Less)

• 48p for properties valued between £51,000 and £500,000

• 43.2p for properties under £51,000

These rates are lower than in 2025/26, helping to cushion the impact of increased rateable values.

For Retail, Hospitality and Leisure (RHL) Businesses

A new RHL multiplier replaces the previous relief scheme:

• 43p for properties valued between £51,000 and £500,000

• 38.2p for properties under £51,000

This aims to continue targeted support for the sector following the withdrawal of pandemic-era reliefs.

 Larger Properties (£500,000+ Rateable Value)

• A multiplier of 50.8p will apply.

Separate multiplier arrangements continue to apply in the City of London.

Additional Support for Pubs

Following industry feedback, the Government has introduced an additional 15% relief for pubs, on top of any other eligible reliefs. This measure recognises the ongoing challenges facing the sector.

Small Business Rate Relief (SBRR)

Small Business Rate Relief continues to support smaller premises:

• Properties with a rateable value of £12,000 or less pay no business rates.

• Between £12,000 and £15,000, relief gradually reduces from 100% to 0%.

This remains a vital support mechanism for micro and small enterprises.

Transitional Relief: Limiting Sudden Increases

To prevent sharp increases following revaluation, transitional relief caps how much your bill can rise each year from 1 April 2026 to 31 March 2029.

Maximum Annual Increase Caps

These caps apply only where bills increase as a result of revaluation.

Supporting Small Business Relief

If your property’s rateable value rises in 2026 and you lose part of your small business, rural, RHL or 2023 supporting relief, you may qualify for Supporting Small Business Relief.

For 2026/27, increases are capped at the higher of £800 or:

• 5% (rateable value under £20,000 / £28,000 in London)

• 15% (between £20,001 and £100,000)

• 30% (over £100,000)

This ensures businesses are not disproportionately affected by sudden valuation increases.

What Should Businesses Do Now?

With revaluation approaching, businesses should:

• Review their updated rateable value

• Assess eligibility for relief schemes

• Factor potential increases into financial planning

• Seek professional advice if required

Early preparation can help avoid unexpected financial pressure when the new rates take effect in April 2026.

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