Business Rates Explained: How Bills Work After the 2026 Revaluation
Rateable value, multiplier and relief. The 1 April 2026 revaluation, the five new multipliers, small business rate relief up to £12,000, and how to challenge a wrong value.
When Mark signed the lease on a small unit for his bike repair shop in Derby, he budgeted carefully for rent, insurance and stock. Then a letter from the council arrived with a bill he had not planned for at all. A week of panic later, he discovered he qualified for relief that cut it to nothing — but only because a neighbour told him to ask. Business rates confuse almost everyone who takes on premises, and the rules changed significantly in England in April 2026. Understanding them before you sign can save you thousands.
| England multiplier from 1 April 2026 | Pence per £1 of rateable value |
|---|---|
| Small business, retail/hospitality/leisure | 38.2p |
| Small business (under £51,000) | 43.2p |
| Standard, retail/hospitality/leisure | 43.0p |
| Standard | 48.0p |
| High-value (£500,000 and above) | 50.8p |
How a business rates bill is worked out
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Business rates are a tax on most non-domestic property — shops, offices, workshops, pubs, warehouses. The sum itself is simple once you know the parts. Every property has a rateable value, set by the Valuation Office Agency and roughly equal to its yearly open-market rent. Your council multiplies that by a multiplier, expressed in pence per pound, and then takes off any reliefs you qualify for. So a unit with a rateable value of £20,000 on the 43.2p multiplier has a starting bill of £8,640 for the year, before reliefs. You normally pay in ten monthly instalments, though you can ask for twelve. Mark’s unit had a rateable value of £9,500, which turned out to matter a great deal.
The 2026 revaluation changed the numbers
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Rateable values are updated at regular revaluations so bills keep pace with the property market. The latest took effect on 1 April 2026 and is based on rental values as they stood on 1 April 2024. For some properties the rateable value went up, for others it went down, depending on how rents in that area and sector had moved. That means a bill you remember from last year may not be a guide to this year’s. If you are looking at premises now, check the current rateable value on the government’s find-a-business-rates service rather than relying on an old figure from the landlord or the previous tenant.
Five multipliers instead of two
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Until 2026 there were two multipliers in England: small and standard. From 1 April 2026 there are five. The small business multiplier of 43.2p applies to properties with a rateable value under £51,000, and the standard multiplier of 48.0p to those above. Retail, hospitality and leisure properties under £500,000 get their own lower rates: 38.2p for smaller properties and 43.0p for larger ones. At the top, a new high-value multiplier of 50.8p applies to properties with a rateable value of £500,000 or more, which mostly affects large stores, offices and distribution sites rather than small firms. Knowing which one applies to you is the first check on any bill.
Small business rate relief can wipe out the bill
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This is what saved Mark. If your business occupies only one property and its rateable value is £12,000 or less, you normally get 100% small business rate relief — nothing to pay. Between £12,001 and £15,000, the relief tapers gradually from 100% down to nothing. Above £15,000 there is no small business rate relief, but you still get the lower small business multiplier if your rateable value is under £51,000. There are rules if you take on a second property, so tell the council before you expand. Crucially, relief is not always applied automatically. If you think you qualify, apply to your council straight away, as Mark eventually did.
Retail, hospitality and leisure: lower rates for good
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For several years, shops, cafes, pubs, gyms and similar businesses received a temporary percentage discount known as retail, hospitality and leisure relief. From April 2026 that was replaced with something permanent: the two lower multipliers for qualifying properties with a rateable value below £500,000. The government describes it as a permanent cut worth close to £1 billion a year. Whether your property counts as retail, hospitality or leisure depends on how it is used, and the definitions can be narrower than you expect, so check with your council. If your business model is tight, factor the saving into your cash flow forecast rather than assuming it.
Other reliefs worth knowing about
Small business rate relief gets the attention, but it is not the only one. Charities and community amateur sports clubs can get mandatory relief of 80% on property they use for charitable purposes. Rural rate relief can help the only village shop, post office or pub in a small rural settlement. Empty property usually has a short rate-free period after it becomes vacant — commonly three months, or six for many industrial buildings — before full rates apply. Councils can also offer discretionary relief in hardship cases. None of these are guaranteed, and most need an application, so ring your council’s business rates team and ask plainly what you might be entitled to. It costs nothing to ask, and the answer can be worth thousands.
If the rateable value looks wrong, challenge it
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Rateable values are estimates, and estimates can be wrong. If yours looks too high compared with similar properties nearby, or the details held about your premises are wrong — the floor area, the use, the condition — you can use the Valuation Office Agency’s check and challenge service. First you check the facts, then you can challenge the valuation with evidence. It is free to do yourself. Be wary of firms cold-calling to offer a guaranteed rates reduction for an upfront fee; you can do it without them, and if you want help, use a qualified surveyor or your accountant.
Budget for rates before you sign anything
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The time to understand business rates is before you commit to premises, not when the first bill arrives. Look up the rateable value, work out which multiplier applies, check whether you qualify for small business rate relief, and ask whether any service charge or rates are included in the rent. Add the result to your start-up costs and monthly overheads. Our guide to what to check before signing a commercial lease covers the rest. If you are just starting out, it is also worth asking whether you need premises at all; plenty of firms begin from home, as our list of home-based business ideas shows.
Moving, expanding or closing
Rates follow the occupier, so tell the council whenever something changes. If you move out, notify them the same week so you stop being billed. If you take a second property, check how it affects small business rate relief before you sign, because relief can change once you occupy more than one. If trading gets hard, speak to the council early about instalments; councils generally prefer an agreed plan to enforcement, and unpaid rates can escalate quickly. Treat rates as one of the fixed costs you plan for when managing business risk, and as one of the first calls to make if you are trading through a downturn.
Where Mark ended up
With a rateable value of £9,500 and only one property, Mark qualified for full small business rate relief. His bill fell to zero from the start of his lease once the council applied it. Two years later, when he considered a second unit, he checked first how that would affect his relief and budgeted for it before signing. That is the practical lesson of business rates: the rules are not complicated once you know the three parts — rateable value, multiplier and relief — but they reward people who check before they commit. Rules differ in Scotland, Wales and Northern Ireland, so check locally if you trade there.
Frequently asked questions
What are business rates?
A tax on most non-domestic property, such as shops and offices. The bill is the rateable value multiplied by a multiplier, minus any reliefs.
What are the business rates multipliers for 2026/27?
In England: 43.2p small business, 48.0p standard, 38.2p and 43.0p for retail, hospitality and leisure, and 50.8p for properties worth £500,000 or more.
Who gets small business rate relief?
Businesses using one property with a rateable value of £12,000 or less usually get 100% relief. It tapers to zero between £12,001 and £15,000.
When was the latest business rates revaluation?
The latest revaluation took effect on 1 April 2026, based on rental values as at 1 April 2024.
Can I challenge my rateable value?
Yes. Use the Valuation Office Agency’s free check and challenge service if the details or the valuation look wrong.
Do I pay business rates if I work from home?
Usually not, if you use a small part of your home and have not made structural changes. Rules differ, so check with the Valuation Office Agency.
This article is general information about business rates in England, not tax advice. Multipliers and reliefs reflect the position for 2026/27; rules differ in Scotland, Wales and Northern Ireland. Check your bill and eligibility with your local council.
