Business Rates in 2026: How They're Calculated, New Multipliers and Reliefs

Business rates are the property tax on shops, offices, pubs, warehouses, factories and holiday lets. For many small firms they are the second-biggest overhead after rent. April 2026 brought the biggest shake-up in years: a revaluation in England and Wales, five new multipliers in England and the end of the 40% retail, hospitality and leisure discount. This guide explains how your bill is worked out in 2026, which reliefs you can still get, and how to check and challenge your valuation.

Quick answer

Business rates = rateable value × multiplier − reliefs. The Valuation Office sets your rateable value, which is the property's estimated annual rent on 1 April 2024. Your council applies the multiplier and sends the bill. In England for 2026 to 2027, most small properties pay 43.2p in every £1 of rateable value, and qualifying shops, pubs and leisure premises pay 38.2p.

• No rates if you use one property with a rateable value of £12,000 or less (small business rate relief)

• Five multipliers in England from 1 April 2026, from 38.2p to 50.8p

• The 40% retail, hospitality and leisure relief ended on 31 March 2026

• Transitional relief caps 2026 to 2027 increases at 5%, 15% or 30% depending on size

• Check and challenge your valuation free through your VOA business rates valuation account

What are business rates and who pays them?

Business rates (officially "non-domestic rates") are charged on most non-domestic property. The occupier — usually the tenant — pays while the property is in use. The owner pays when it's empty, after any empty property relief runs out.

You'll usually pay if you use a building, or part of one, for business. That includes:

• shops, cafés, restaurants and pubs
• offices, workshops, warehouses and factories
• holiday lets in England that are available for at least 140 nights and actually let for at least 70 nights in a year
• part of your home that is used only for business, or where customers visit or staff work

Some property is exempt, including agricultural land and buildings, buildings used for the training or welfare of disabled people, and places of public religious worship. If you work from a spare bedroom or sell by post, you normally pay Council Tax only — not business rates.

Councils send bills in February or March for the year from 1 April. You can normally pay in monthly instalments, so ask your council how many it offers. Business rates are an allowable expense, so they reduce the profit you pay Corporation Tax or Income Tax on.

How business rates are calculated

There are three steps:

From rent to rates bill

Step 1

Valuation Office sets the rateable value

Step 2

Council applies the right multiplier

Step 3

Reliefs are deducted

Step 4

Your bill

for 1 Apr – 31 Mar

Rateable value is the Valuation Office's estimate of the annual rent the property could have been let for on the open market on 1 April 2024. It is not what you actually pay in rent, and it doesn't depend on your turnover or profit. The Valuation Office looks at size, location, use and rents for similar properties nearby. You can see how your valuation was worked out, including floor areas and price per square metre, on GOV.UK.

The multiplier (sometimes called the "poundage") is the number of pence charged per £1 of rateable value. The government sets it every year.

The 2026 revaluation and new multipliers

Properties in England and Wales are revalued every three years. The latest revaluation took effect on 1 April 2026, based on rents at 1 April 2024. At the same time, England replaced its two multipliers with five. Lower rates apply to retail, hospitality and leisure (RHL) properties, and a higher rate applies to the most valuable properties.

The lower multipliers look much cheaper, but they need reading alongside the new valuations. Rateable values rose at the revaluation for many properties. Most of the old discounts have gone, too.

Worked examples (2026 to 2027, before reliefs)

• Accountant's office, rateable value £40,000: £40,000 × 0.432 = £17,280
• Café, rateable value £30,000: £30,000 × 0.382 = £11,460 — £1,500 less than it would pay at the general rate (£12,960)
• Café on a busy high street, rateable value £110,000 (GOV.UK's own example): £110,000 × 0.43 = £47,300
• Distribution warehouse, rateable value £600,000: £600,000 × 0.508 = £304,800

Whether your property counts as retail, hospitality or leisure — shops, restaurants, pubs, cinemas, gyms, hotels and similar — is decided by the council. Check your bill shows the multiplier you expect.

Business rates relief in 2026

Small business rate relief

If you occupy one property in England:

• rateable value of £12,000 or less: 100% relief — you pay nothing
• between £12,000 and £15,000: relief tapers from 100% to 0%. At £13,500 it's 50%.

Example: a printing workshop with a rateable value of £13,500 would pay £13,500 × 0.432 = £5,832. Half of that is relieved, so the bill is £2,916.

You can keep relief on your main property if you take on a second one, as long as no other property is worth more than £2,899 and the total rateable value is under £20,000 (£28,000 in London). If you take on a second property that breaks those rules, you keep the relief for a grace period. That period is 36 months for second properties taken on from 27 November 2025, or 12 months for those taken on before that date. Properties under £51,000 that don't get relief still pay the lower small business multiplier.

Retail, hospitality and leisure relief — now closed

From 2020 to March 2026, qualifying shops, pubs, restaurants and gyms in England got a percentage off their bill (40% in 2025 to 2026). That relief ended on 31 March 2026, and you can no longer make new claims. The cheaper RHL multipliers above replace it. You can still ask your council about unclaimed relief for earlier years. Pubs and live music venues have a separate relief of their own.

Transitional relief

If the revaluation pushed your bill up, transitional relief phases in the increase. Your council applies it automatically.

Maximum yearly bill increase under transitional relief (England)

Rateable value	2026 to 2027	2027 to 2028	2028 to 2029
Up to £20,000 (£28,000 in London)	5%	10% + inflation	25% + inflation
£20,001 – £100,000 (£28,001 – £100,000 in London)	15%	25% + inflation	40% + inflation
Over £100,000	30%	25% + inflation	25% + inflation

Up to £20,000 (£28,000 in London)

2026 to 2027

5%

2027 to 2028

10% + inflation

2028 to 2029

25% + inflation

£20,001 – £100,000 (£28,001 – £100,000 in London)

2026 to 2027

15%

2027 to 2028

25% + inflation

2028 to 2029

40% + inflation

Over £100,000

2026 to 2027

30%

2027 to 2028

25% + inflation

2028 to 2029

25% + inflation

Supporting small business relief

This helps businesses that lost small business, rural or RHL relief at the revaluation. For 2026 to 2027, the bill can rise by no more than £800 or the transitional percentage cap, whichever is greater. GOV.UK's example: a gift shop paid £4,491 in 2025 to 2026 after 40% RHL relief. The 5% cap would be only £225, so the £800 figure applies and the 2026 to 2027 bill is £5,291.

Other reliefs

• Empty property relief: no rates for 3 months after a property becomes empty, and a further 3 months for industrial premises. Listed buildings and properties under £2,900 are relieved until they're reoccupied.
• Charitable rate relief: up to 80% off for charities and community amateur sports clubs.
• Rural rate relief: for the only shop or post office in a qualifying rural settlement.
• Improvement relief, hardship relief, enterprise zones and freeports: apply to your council.

How to check and challenge your rateable value

Valuations are wrong more often than people think — an outdated floor area, the wrong use class, or roadworks outside your door. In England and Wales the process has three stages, all run online through your business rates valuation account:

Check, challenge, appeal

1. 1

   Find your valuation

   Search your address on GOV.UK's 'Find a business rates valuation'. Compare your rateable value and floor area with similar properties nearby.

   Find a business rates valuation
2. 2

   Set up your valuation account and claim the property

   Register with the Valuation Office and add your property. Allow time — claiming a property can take up to 15 days.

3. 3

   Raise a check case

   Ask the Valuation Office to correct the facts (size, layout, use) or report a material change, such as long-term roadworks. You need a check decision before you can challenge, even if the facts are right.

4. 4

   Submit a challenge

   Within 4 months of the check decision, explain why the valuation is wrong and give your evidence, such as rents for comparable properties. If the check has had no decision after 12 months, you have up to 16 months from submitting it.

5. 5

   Appeal to the Valuation Tribunal

   If you disagree with the challenge decision, appeal within 4 months of it, or within 18 months of submitting the challenge if you've had no decision. You can only rely on evidence you gave at check and challenge.

Checks and challenges are free. Don't sign a contract with a rating agent who cold-calls you before you've looked at your valuation yourself. If an agent says they need an upfront fee, check whether they're RICS-regulated or IRRV-qualified. Keep paying your bill while a challenge is under way — the council will refund any overpayment if your rateable value goes down.

If your property changes — you extend it, split it, merge units or change its use — tell the Valuation Office through your account. Tell your council about changes to occupation, such as moving in, moving out or taking on a second property. Otherwise you may get a backdated bill.

Business rates in Scotland, Wales and Northern Ireland

Business rates are devolved, so the multipliers, reliefs and processes differ:

• Wales was revalued on 1 April 2026 alongside England, using the same 1 April 2024 valuation date. But the Welsh Government sets its own multiplier and its own small business rates relief. Check your council's figures.
• Scotland calls them non-domestic rates. Local assessors, not the Valuation Office, value properties. The Small Business Bonus Scheme gives 100% relief where the combined rateable value is up to £12,000. Relief then tapers to 25% at £15,000 and to nothing at £20,000 for single properties. Your total rateable value must be £35,000 or less, and each property £20,000 or less.
• Northern Ireland uses a regional rate plus a district rate, administered by Land & Property Services.

Common business rates mistakes

• Assuming relief is automatic. Small business rate relief is often applied automatically, but not always. Check your bill and ask your council.
• Missing a second-property change. Taking on a second unit can end your small business relief once the grace period is over.
• Not budgeting for the RHL change. A café that paid 40% less in 2025 to 2026 now relies on the lower multiplier and transitional or supporting relief instead.
• Paying a rating agent for something you can do free. Look at your valuation yourself first.
• Forgetting holiday-let rules. In England a holiday let only moves to business rates if it meets the 140-night availability and 70-night letting test. If it doesn't, it pays Council Tax.

Official GOV.UK, VOA and Scottish Government links

• Estimate your business rates2026 to 2027 multipliers and calculator
• Find a business rates valuationLook up any property's rateable value
• Business rates reliefSmall business, transitional, empty property and more
• Challenging your business rates valuationVOA guidance and time limits
• Appealing to the Valuation TribunalAfter a challenge decision
• Contact your council about business ratesBills, payments and relief applications
• Small Business Bonus Scheme (Scotland)Scottish relief

What to do next

Look up your rateable value today and check the facts the Valuation Office holds. Then make sure your bill uses the right multiplier and includes every relief you qualify for. Build the bill into your monthly costs with the budget planner. If you're choosing premises, run the numbers through the break-even calculator first. Setting up a new business? Read how to set up a limited company or register as a sole trader.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How are business rates calculated?

Your council multiplies the property's rateable value — set by the Valuation Office — by a multiplier, then deducts any reliefs. In England for 2026 to 2027, the multiplier is 43.2p for most properties with a rateable value under £51,000. A shop with a rateable value of £20,000 that doesn't qualify for the retail rate pays £20,000 × 0.432 = £8,640 before reliefs.

What are the business rates multipliers for 2026/27?

England now has five. Properties with a rateable value under £51,000 pay 43.2p, or 38.2p for retail, hospitality and leisure. From £51,000 to £499,999 it's 48p, or 43p for retail, hospitality and leisure. Properties worth £500,000 or more pay 50.8p. In 2025 to 2026 there were just two multipliers: 49.9p and 55.5p.

Who qualifies for small business rate relief?

In England, if you use only one property and its rateable value is £12,000 or less, you pay no business rates. Between £12,000 and £15,000 the relief tapers — at £13,500 you get 50% off. You can keep it with a second property if no other property is worth over £2,899 and the total is under £20,000 (£28,000 in London).

How do I check or challenge my rateable value?

Look up your property on GOV.UK's 'Find a business rates valuation' service. To change it, sign in to your business rates valuation account and raise a check case to correct the facts. Within 4 months of that decision you can submit a challenge. If you still disagree, appeal to the Valuation Tribunal within 4 months of the challenge decision. Checking and challenging are free.

Has retail, hospitality and leisure relief ended?

Yes. The 40% retail, hospitality and leisure relief in England ended on 31 March 2026, and you can no longer make new claims. From 1 April 2026, qualifying properties under £500,000 pay permanently lower multipliers instead. If you lost relief at the revaluation, supporting small business relief limits your bill increase to the greater of £800 or a percentage cap.

Do I pay business rates if I work from home?

Usually not, if you use a small part of your home, such as a bedroom office, or sell by post. You may have to pay if part of the property is used only for business — for example, a converted garage salon — if customers visit, or if you employ people there. Ask the Valuation Office if you're unsure.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 7 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Estimate your business rates — GOV.UK · accessed 7 October 2026
2. 2.Business rates — how your rates are calculated — GOV.UK · accessed 7 October 2026
3. 3.Business rates — revaluation — GOV.UK · accessed 7 October 2026
4. 4.Small business rate relief — GOV.UK · accessed 7 October 2026
5. 5.Retail, hospitality and leisure relief — GOV.UK · accessed 7 October 2026
6. 6.Transitional relief — GOV.UK · accessed 7 October 2026
7. 7.Supporting small business relief — GOV.UK · accessed 7 October 2026
8. 8.Empty property relief — GOV.UK · accessed 7 October 2026
9. 9.Exempt properties — GOV.UK · accessed 7 October 2026
10. 10.Raising a check case — Valuation Office Agency · accessed 7 October 2026
11. 11.Challenging your business rates valuation — Valuation Office Agency · accessed 7 October 2026
12. 12.Appealing your business rates to the Valuation Tribunal — Valuation Office Agency · accessed 7 October 2026
13. 13.Business rates — working at home and self-catering accommodation — GOV.UK · accessed 7 October 2026
14. 14.Small Business Bonus Scheme — mygov.scot (Scottish Government) · accessed 7 October 2026
15. 15.Information about the 31 March 2026 deadline for VOA checks and challenges — City of Wolverhampton Council · accessed 7 October 2026