Business rates are set to change again in April 2026 and many organisations are preparing for what this will mean for their costs over the next valuation period. With rateable values now based on 2024 assessments and the previous valuation taking place during the pandemic, a significant number of businesses are seeing noticeable increases.
The government has announced several measures to ease the transition, although some sectors will still feel the impact more than others. Below, we outline the key changes and share examples that show how different types of premises may be affected.
Background
Properties get revalued in business rates every 3 years. April 2026 is when the next values take effect and will be based on property values in 2024, independently assessed by the Valuation Office Agency.
The previous valuation was in the middle of the pandemic, and so lots of business are seeing big increases in their Rateable Values to reflect post-COVID recovery.
You can find your premises rateable value here https://www.gov.uk/find-business-rates. It is important to note that rateable value is NOT the value of the premises
Changes from April 2026
- From April 2026, the government has reduced the rate of tax (known as the ‘multiplier’) for every business.
| Multiplier | 2025/26 | 2026/27 | Scope |
|---|---|---|---|
| For Retail, Hospitality & Leisure Premises | |||
| Small Business RHL multiplier | 38.2p | rateable value <£51,000 | |
| Standard RHL multiplier | 43p | rateable value between £51,000 – £499,999 |
| Multiplier | 2025/26 | 2026/27 | Scope | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For all other premises | |||||||||||||||
| National Small Business multiplier | 49.9p | 43.2p | rateable value <£51,000 | ||||||||||||
| National Standard multiplier | 55.5p | 48p | rateable value between £51,000 – £499,999 | ||||||||||||
| High-Value multiplier | 50.8p | rateable value if £500,000 or above |
- Although the Government has implemented the most significant reduction in multipliers for retail, hospitality, and leisure (RHL) businesses, the 40% RHL discount will be discontinued beginning April 2026
- The ending of the 40% RHL discount will hit RHL businesses hard and so “transitional relief” is being implemented.
| Year | Rateable Value | ||
|---|---|---|---|
| Up to £20,000 | £20,001 – £100,000 | Over £100,000 |
|
| 2026/27 | 5% | 15% | 30% |
| 2027/28 | 10% | 25% | 25% |
| 2028/29 | 25% | 40% | 25% |
- Also, for any business whose value has increased so that they are no longer eligible for small business rates relief – which provides up to 100% relief from business rates for small businesses – they are capping increase at the higher of £800 or the relevant Transitional Relief percentage cap for a property of their value.
- Also, they are also capping the bill increases of properties losing RHL relief at the higher of £800 or the Transitional Relief cap for a property of their value.
On 27 January 2026, the Government announced that pubs and live music venues will benefit from 15% business rates relief in 2026-27. This relief will apply on top of any Transitional Relief or Supporting Small Business Relief they are eligible for.
Their business rates bill will then be frozen in real terms in 2027-28 and 2028-29, meaning it will only go up by inflation in those years.
This now means that there are three categories of premises for rates calculations and therefore three different calculations:
- Retail, Hospitality & Leisure Premises – that ARE pubs or live music venues
- Retail, Hospitality & Leisure Premises – that are NOT pubs or live music venues
- All other premises
To get an estimate of your business rates liability for pubs and live music venues in England, including this relief, click here.
Case study 1: Retail, Hospitality & Leisure Premises – that is NOT a pub or live music venue with a rateable value of £30,000 in 2023, rising to £39,000 in 2026
In 2025/26, for premises with a rateable value of £30,000, the business rates liability was calculated by multiplying the rateable value by the multiplier of 49.9p, and then deducting the 40% RHL relief.
Before the RHL relief, the rates bill would be £30,000 x 0.499 = £14,970. The RHL relief would be worth 40% x £14,970 = £5,988, meaning the final bill would be £14,970 – £5,988 = £8,982.
Due to the 2026 revaluation, the rateable value of the premises have increased from £30,000 in 2025/26 to £39,000 in 2026/27. The premises are eligible for the new permanently lower small business RHL multiplier of 38.2p in 2026/27, so before any reliefs, the rates bill would be £39,000 x 0.382 = £14,898.
To help smooth the transition to the permanently lower RHL multipliers, the Government is also providing relief through the Supporting Small Business scheme for properties losing their RHL relief in 2026/27. This means that the rates bill increase in 2026/27 compared to 2025/26 is capped at the higher of £800 or the relevant Transitional Relief cap (in this case, 15%).
15% of the 2025/26 bill of £8,982 would be £1,347, which is higher than the £800 cap. So, in this case the 15% cap applies. The final bill will be £8,982 + £1,347 = £10,329. This is £4,569 lower than the £14,898 bill they would have seen without the Government’s package of support, including Supporting Small Business relief.
Case study 2: Retail, Hospitality & Leisure Premises – that is NOT a pub or live music venue with a rateable value of £50,000 in 2023, rising to £110,000 in 2026
In 2025/26, for premises with a rateable value of £50,000, the business rates liability was calculated by multiplying the rateable value by the multiplier of 49.9p, and then deducting the 40% RHL relief.
Before the RHL relief, the rates bill would be £50,000 x 0.499 = £24,950. The RHL relief would be worth 40% x £24,950 = £9,980, meaning the final bill would be £24,950 – £9,980 = £14,970.
Due to the 2026 revaluation, the rateable value has increased from £50,000 in 2025/26 to £110,000 in 2026/27. The premises are eligible for the new permanently lower standard RHL multiplier of 43p in 2026/27, so before any reliefs, the rates bill would be £110,000 x 0.43 = £47,300.
To help smooth the transition to the permanently lower RHL multipliers, the Government is providing relief through the Supporting Small Business scheme for properties losing their RHL relief in 2026/27. This means that the rates bill increase in 2026/27 compared to 2025/26 is capped at the higher of £800 or the relevant Transitional Relief cap of, in this case, 30%.
30% of the 2025/26 bill of £14,970 would be £4,491, which is higher than the £800 cap. So, in this case the 30% cap applies. The final bill will be £14,970 + £4,491 = £19,461. This is £27,839 lower than the £47,300 bill they would have seen without the Government’s package of support, including Supporting Small Business relief.
Case study 3: Retail, Hospitality & Leisure Premises – that is NOT a pub or live music venue with a rateable value of £15,000 in 2023, rising to £20,000 in 2026
In 2025/26, for premises with a rateable value of £15,000, the business rates liability was calculated by multiplying the rateable value by the multiplier of 49.9p, and then deducting the 40% RHL relief.
Before the RHL relief, the bill would be £15,000 x 0.499 = £7,485. The RHL relief would be worth 40% x £7,485 = £2,994, meaning the final bill would be £7,485 – £2,994 = £4,491.
Due to the 2026 revaluation, the rateable value has increased from £15,000 in 2025/26 to £20,000 in 2026/27. The premises are eligible for the new permanently lower small business RHL multiplier of 38.2p in 2026/27, so before any reliefs, the bill would be £20,000 x 0.382 = £7,640.
To help smooth the transition to the permanently lower RHL multipliers, the Government is also providing relief through the Supporting Small Business scheme for properties losing their RHL relief in 2026/27. This means that the bill increase in 2026/27 compared to 2025/26 is capped at the higher of £800 or the relevant Transitional Relief cap of, in this case, 5%.
5% of the 2025/26 bill of £4,491 would be £225, which is lower than the £800 cap. So, in this case the £800 cap applies. The final bill will be £4,491 + £800 = £5,291. This is £2,349 lower than the £7,640 bill they would have seen without the Government’s package of support, including Supporting Small Business relief.
Case study 4: Retail, Hospitality & Leisure Premises – that IS a pub or live music venue with a rateable value of £30,000 in 2023, rising to £39,000 in 2026
In 2025-26, before RHL relief, the pub’s business rates bill is £14,970 (£30,000 x 49.9p). The RHL relief would be worth 40% x £14,970 = £5,988, meaning the final 2025-26 bill is £14,970 – £5,988 = £8,982.
In 2026-27, due to the 2026 revaluation, the rateable value of the pub has increased from £30,000 to £39,000. The pub is eligible for the new small business RHL multiplier of 38.2p in 2026-27, so before any reliefs, the pub’s bill would be £39,000 x 38.2p = £14,898.
To help smooth the transition to the permanently lower RHL multipliers, the government is providing relief through the Supporting Small Business scheme for properties losing their RHL relief in 2026-27. This means that the pub’s bill increase in 2026-27 compared to 2025-26 is capped at the higher of £800 or the relevant Transitional Relief cap (in this case, 15%).
15% of the 2025-26 bill of £8,982 would be £1,347, which is higher than the £800 cap. So, in this case, the 15% cap applies: £8,982 + £1,347 = £10,329.
A 15% relief is then applied to the £10,329: £10,329 x 15% = £1,549. £10,329 – £1,549 = £8,780 final bill in 2026-27.
In 2027-28, the pub’s £8,780 bill will only go up by inflation. Assuming the September 2026 CPI figure is 2%, the bill would go up to £8,956 (£8,780 x 1.02).
Assuming the September 2027 CPI figure is 2%, the bill would go up to £9,135 (£8,956 x 1.02).
The upcoming revaluation and changes to the multiplier, RHL discount, and transitional support will affect businesses in different ways depending on their sector and size. Understanding your updated rateable value and how the new rules apply is an important first step in planning ahead.
If you would like support in reviewing your business rates position, interpreting the new reliefs or forecasting the impact on your cash flow, our team at SMH Group is here to help. Get in touch and we can guide you through the changes and what they mean for your organisation.
https://www.gov.uk/government/news/pubs-and-live-music-venues-relief
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