Business rates: what a small firm actually pays after the 2026 revaluation

Business rates are the tax small firms complain about most and check least. That combination is expensive, because rates are one of the few taxes where the amount you pay depends on a number a third party estimated about your property, and where the relief that removes the bill entirely is not always applied automatically.

April 2026 brought the biggest set of changes in years: a revaluation, a completely new multiplier structure, and the end of the temporary retail, hospitality and leisure relief that had been propping up high street bills since the pandemic. Here is how the bill is built, and where the money is.

How the bill is calculated

Two numbers. Your property has a rateable value set by the Valuation Office Agency, broadly its estimated annual open market rent. You multiply that by the relevant multiplier, expressed in pence in the pound, and then subtract any relief you qualify for.

The 2026 revaluation took effect on 1 April 2026 in England and Wales, and the new rateable values are based on open market rental values as at 1 April 2024 — the antecedent valuation date. That two-year lag is why a revaluation can feel out of step with what is happening on your street right now. Scotland, Wales and Northern Ireland run their own systems with their own multipliers and reliefs, so the England figures below are England figures.

The new multipliers

England moved from two multipliers to five in April 2026. For properties with a rateable value below £51,000, the small business multiplier is 38.2p for retail, hospitality and leisure properties and 43.2p for everything else. Between £51,000 and £499,999, the standard multiplier is 43p for retail, hospitality and leisure and 48p for everything else. Properties at £500,000 and above pay the large property multiplier of 50.8p.

The important structural change underneath that: the temporary retail, hospitality and leisure relief scheme ended on 31 March 2026 and has been replaced by permanently lower multipliers for qualifying RHL properties below £500,000. For a shop or café, a permanent 5p discount on the multiplier is more useful than a temporary percentage discount that had to be renewed at every Budget — but it is a different shape of support, and for some businesses the transition from the old relief to the new multiplier is a net increase.

Small business rate relief, which is the big one

If your property has a rateable value of £12,000 or less and it is the only property your business occupies, you normally pay no business rates at all. Between £12,001 and £15,000 the relief tapers from 100% down to nothing on a straight line.

A worked example. A shop with a rateable value of £14,000 sits three-quarters of the way up the taper, so relief is (15,000 − 14,000) ÷ 3,000, which is 33.3%. The gross bill at the small business RHL multiplier of 38.2p is £5,348. After relief, it is £3,566. Get the rateable value down to £12,000 and the bill is nil — which is why the valuation itself is worth checking rather than accepting.

The difference between a rateable value of £12,000 and £14,000 is not £2,000. On those numbers it is £3,566 a year, every year, until the next revaluation.

There is a second-property trap worth knowing. Taking on an additional property has historically cost small firms their relief on the first one. The grace period has now been extended from one year to three for businesses taking on a second property after 27 November 2025, so an expansion no longer immediately triggers the loss. Businesses that expanded before that date keep the old one-year grace period.

Note also that properties with a rateable value below £51,000 get the small business multiplier automatically, even where the £15,000 relief threshold is long passed.

The reliefs people forget to claim

Transitional relief caps how far a bill can rise in a single year following a revaluation, and is applied automatically — but it is worth checking it has been, because a large jump in rateable value should not arrive as a large jump in the bill all at once.

Improvement relief means qualifying improvements to a property do not increase the rateable value for twelve months from completion. If a refit or extension is on the cards, the timing of the works and the timing of the valuation are worth coordinating, which is a conversation to have before the builders start rather than after.

Empty property relief gives three months at nil for most properties and six months for industrial premises. Charitable rate relief is 80% mandatory with discretionary top-up. Rural rate relief applies to the last shop, pub or post office in a qualifying settlement. And most councils hold a discretionary hardship pot that is never advertised and is occasionally granted to businesses that ask. If a fit-out is what triggered the higher valuation in the first place, the payback arithmetic in the refit that took three years to pay back is worth running with the rates increase included as a cost.

Challenging your rateable value

The rateable value is an estimate, and estimates contain errors. The most common are simply factual: floor areas measured wrongly, a mezzanine counted as retail space, a storage area valued as trading space, or an entry that still reflects a layout you changed four years ago.

You can view the detailed valuation for your property on the Valuation Office Agency's service and see exactly what has been assumed about it. The formal route to change it is Check, Challenge, Appeal — three stages, starting with correcting the facts, which is where most successful cases are actually won. It is free to do yourself.

Be careful about who helps you. Unsolicited approaches from rating agents promising a reduction for a share of the saving are common, and some ask for fees up front for work that amounts to filing a check case anyone could file. If you want representation, use a firm regulated by the RICS or the IRRV.

Four things to do this week

Look up your rateable value and read the detailed valuation, checking the floor areas against reality. Confirm whether small business rate relief is showing on your bill — it is not always applied automatically to a newly occupied property. Check that the multiplier on your bill matches the category your property actually falls into, because the retail, hospitality and leisure classification is worth 5p in the pound. And if you are planning works, ask about improvement relief before you commit.

Rates sit alongside rent and service charge as the fixed cost that determines how much trade you need before you earn anything — the same calculation that drives break-even point before you launch, and one worth revisiting whenever any of the three changes.

Common questions

Do I pay business rates if my rateable value is under £12,000?

In England, if your property has a rateable value of £12,000 or less and it is the only property your business occupies, small business rate relief normally reduces the bill to nothing. Between £12,001 and £15,000 the relief tapers on a straight line from 100% to zero, so a property at £14,000 gets about a third off. The relief is not always applied automatically, particularly on a newly occupied property, so check your bill rather than assuming. Scotland, Wales and Northern Ireland operate separate small business schemes with different thresholds, so the figures above apply to England only.

What are the business rates multipliers for 2026/27?

England moved to five multipliers in April 2026. Below a rateable value of £51,000, retail, hospitality and leisure properties use a small business multiplier of 38.2p and everything else uses 43.2p. Between £51,000 and £499,999, the standard multipliers are 43p for retail, hospitality and leisure and 48p for other properties. Properties valued at £500,000 or above pay a large property multiplier of 50.8p. The permanently lower retail, hospitality and leisure multipliers replaced the temporary RHL relief scheme, which ended on 31 March 2026, so the category your property falls into is now worth checking on the bill itself.

Can I challenge my rateable value?

Yes, and it is free to do yourself through the Valuation Office Agency's Check, Challenge, Appeal process. Start by viewing the detailed valuation for your property, which sets out the floor areas and assumptions used. Most successful cases are won at the first stage on plain factual errors — a mismeasured floor area, storage space valued as trading space, or a layout that changed years ago and was never reflected. If you want professional help, use a firm regulated by RICS or the IRRV, and be wary of unsolicited approaches asking for fees up front or a large share of any saving.

What happened to the retail, hospitality and leisure relief?

The temporary retail, hospitality and leisure business rates relief scheme, which had discounted bills by a percentage since the pandemic and was renewed at successive Budgets, ended on 31 March 2026. In its place, England introduced permanently lower business rates multipliers for qualifying retail, hospitality and leisure properties with rateable values below £500,000 — 38.2p below £51,000 and 43p between £51,000 and £499,999. The support is now built into the multiplier rather than applied as a discount, which makes it more predictable to plan around, though the change is not a straight swap and some businesses saw their overall bill rise.