Business rates are a tax paid by businesses with a commercial property – and significant changes are on the way.
The government is planning business rates reforms, with details set to be revealed in the Autumn Budget. And with new property valuations coming in April 2026, it’s important to make sure you’re aware of what this means for your tax bill.
Keep reading to understand more about business rates, how much you need to pay, and what you need to do before the revaluation next year.
What’s changing from April 2026?
- revaluation of all properties in England and Wales, based on rateable values from 1 April 2024
- new, permanently lower multipliers for retail, hospitality, and leisure properties in England under £500,000
- new banding for discounts for retail, hospitality, and leisure properties
- the Valuation Office Agency will merge with HMRC
SMEs urged to check business rates valuation
The government is urging small business owners to check the valuation of their commercial property by signing into their Business Rates Valuation Account.
This will tell you the rateable value of your property (and the future value) to give you an indication of how much your business rates bill will be.
Small businesses are concerned how the 2026 revaluation of properties is going to affect their bill.
Challenging your rateable value
If you see your new valuation and think it’s too high, you can use your valuation account to start an appeal process in England and Wales. However, the deadline for appealing your new rate is 31 March 2026.
Commercial business insurance can help you if you need professional advice or support making a legal challenge. Always check your policy documents to see what’s covered in your policy.
Article contents:
What are business rates?
Business rates are taxes designed to help fund services in your local authority. The government charges business rates on properties like offices, shops, pubs, and warehouses – most non-domestic properties will need to pay business rates.
They may also be charged where only part of a building is used for non-domestic purposes.
Business rates are handled differently if your property is in Scotland or Northern Ireland.
How are business rates calculated?
Business rates are calculated using a property’s ‘rateable value’. The rateable value is a property’s estimated value on the open market. The last revaluation, which came into effect on 1 April 2023, refers to values as of 1 April 2021. Revaluation is conducted by the Valuation Office Agency (VOA) and usually happens every three years.
The next business rates revaluation is set for April 2026, with the rates usually available to see a few months before this.
New multiplier rates will be announced for 2026-2027 in the Autumn Budget.
You’ll soon be able to log in to your business rates account to see the new valuation of your property and work out what your new bill will be next spring.
This system is referring to properties in England and Wales, but Scotland is also changing its system properties will go through revaluation.
How much are business rates?
It’s possible to estimate your business rates by multiplying your property’s rateable value by the relevant number (minus any business rate relief you’re eligible for).
| Year | Standard multiplier* | Small business multiplier* |
| 2025-2026 | 55.5p | 49.9p |
| 2024-2025 | 54.6p | 49.9p |
| 2023-2024 | 51.2p | 49.9p |
| 2022-2023 | 51.2p | 49.9p |
Businesses with premises with a rateable value above £51,000 pay the standard multiplier, while those with a rateable value below £51,000 pay the small business multiplier.
From 2026-27 onwards, there will be a new high-value multiplier for properties with a rateable value of £500,000 and over. The standard multiplier will apply to properties with a rateable value of £51,000 to £499,000.
*These rates apply to properties in England
What is the small business rates relief?
Reliefs are available for some properties in England – the most useful for small firms is the small business rate relief. You can get this relief if your property has a rateable value of less than £15,000, and generally if your business only uses one property:
- full relief is available on properties with a rateable value of £12,000 or less
- for those between £12,001 and £15,000, relief goes down gradually from 100 per cent to zero per cent
If you’re a small business but you don’t qualify for small business rate relief, your bill will still be worked out using the lower small business multiplier (for properties with a rateable value below £51,000).
There are other business rates reliefs available, including the rural rate relief and charitable rate relief. You can read more about these on the government website.
Lower multipliers for retail, hospitality, and leisure from 2026
Business rates relief is changing for retail, hospitality, and leisure businesses in England, such as shops, restaurants, and gyms. For 2025-26 billing year, these businesses have been able to claim a 40 per cent discount (up to a maximum of £110,000).
However, this scheme will be replaced with new lower rates from 2026, which the government says should avoid the ‘annual cliff-edge’ businesses face under the current system.
From April 2026, permanently lower multipliers for retail, hospitality, and leisure properties in England will be introduced. The aim is to give greater certainty for high street businesses compared to the current business rates system.
The changes will apply only to properties with rateable values less than £500,000, but this could see lower bills for some in April 2026. Properties with a value of £500,000 and above will face a higher multiplier to fund lower costs for smaller businesses.
The Welsh government is also proposing lower multipliers for shops, kiosks, and post offices with a rateable value of £51,000 or less.
Business rates reforms on the way
The government has shared its plan for transforming business rates to “support economic growth and entrepreneurship”. They’re reviewing proposals to change the current tax structure and enhance the business rates relief for small businesses.
It’s hoped changes will encourage investment and support high streets to thrive.
The Chancellor Rachel Reeves will announce more on this in the Autumn Budget 2025.
How to work out business rates – an example
You run a business with a premises that has a rateable value of £21,000. Using the small business multiplier (49.9p for each pound your premises is valued at), your total business rates would be £10,479.
On the other hand, if your business premises have a value of less than £15,000, you’d be able to apply for small business rates relief to reduce your bill. Read more about business rates relief for small businesses below.
Using the VOA business rates checker
The government has a tool you can use to check the VOA’s rateable value for your property.
This is a useful tool, because if you think that your rateable value is wrong, your business rates could be too.
Using the tool, you can request changes to property or valuation details, see the valuation details of other properties, and apply to change the rateable value.
You’ll need to use this tool if you want to estimate your business rates.
Business rates calculator
If you want to estimate your business rates bill, you’ll need to find out your property’s rateable value.
With this you can find the correct multiplier, which will depend on the rateable value. Then, deduct any reliefs you’re entitled to.
You can use the government’s business rates calculator.
This article is a guide only – but for more help with business rates, the government says you can contact qualified surveyors. They list the Royal Institution of Chartered Surveyors (RICS), the Institute of Revenues, Rating and Valuation (IRRV) and the Rating Surveyors Association.
Is there a business rates exemption?
If you can get relief on your business rates, it could mean you’re exempt from paying. However, in most cases it will just be a reduction.
There are some buildings that are totally exempt from business rates:
- agricultural land and buildings
- buildings used for the welfare or training of disabled people
- church halls or buildings registered for public religious worship
Business rates and working from home
You won’t generally have to pay business rates if you use a small part of your home for business purposes (for example, if you use a room as an office).
But in some circumstances you’ll have to pay business rates on top of council tax – if, for example:
- your property’s split into domestic and business parts, for example in the case of a flat above a shop
- you sell things to people who visit the property
- you employ anyone at your property
- you’ve made changes to your home so you can run your business (like converting your garage)
If you’re not sure whether or not you should be paying business rates, you should contact the VOA.
More useful articles for small businesses
- Corporation tax: a guide for small businesses
- A guide to dividend tax and the dividend tax rate
- A guide to going self-employed in the UK
- Why do I need business insurance?
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