On 1 April 2026, the biggest shake-up to England’s business rates system in over a decade takes effect. Whether you are a first-time commercial landlord, a small business owner or a property investor, understanding how business rates work from this date forward is essential. This guide explains the system from the ground up, using the confirmed 2026/27 figures.
Why a new guide? We published our original Beginner’s Guide to Business Rates in January 2025. Since then, the Government has confirmed a full national revaluation, introduced five new multiplier tiers (replacing the old two-tier system), overhauled transitional relief, and tightened the rules around empty property occupation. This 2026 edition replaces our earlier guide with every confirmed number and rule change.
What Are Business Rates?
Business rates are a tax on non-domestic property in England. If you occupy or own a commercial building (an office, shop, warehouse, pub, factory or any other non-residential premises), you are liable for business rates on that property. The formal name is National Non-Domestic Rates (NNDR), but almost everyone calls them business rates.
They work in a similar way to council tax on homes. Every non-domestic property is given a rateable value by the Valuation Office Agency (VOA), and that value is multiplied by a rate set by central Government to produce an annual bill. The money goes to local councils and funds local services.
Rateable Values: The Starting Point
Every commercial property in England has a rateable value (RV). This is the VOA’s estimate of the annual open-market rental value of the property on a fixed valuation date. For the 2026 rating list, that valuation date is 1 April 2024, meaning the VOA assessed what each property would have rented for on that date.
The 2026 revaluation updated the rateable values of all 2.13 million non-domestic properties in England. The total rateable value rose from £70.8 billion to £84.4 billion, an increase of 19.2% nationally. Individual properties may have seen their rateable value rise, fall or stay roughly the same depending on local market conditions.
You can look up any property’s rateable value on the VOA’s website, or use our Business Rates Calculator to search by postcode and see a full bill breakdown instantly.
The Five Multipliers (New for 2026/27)
Your annual business rates bill is calculated by multiplying your property’s rateable value by a figure called the multiplier (expressed in pence per pound). Until 31 March 2026, England had two multipliers. From 1 April 2026, there are five. This is one of the most significant structural changes to business rates in a generation.
The five confirmed multipliers for 2026/27 are:
| Multiplier | Rate (pence) | Applies to |
|---|---|---|
| Small business RHL | 38.2p | Retail, hospitality & leisure properties with RV below £51,000 |
| Small business non-RHL | 43.2p | All other properties with RV below £51,000 |
| Standard RHL | 43.0p | RHL properties with RV between £51,000 and £499,999 |
| Standard non-RHL | 48.0p | All other properties with RV between £51,000 and £499,999 |
| Large property | 50.8p | All properties with RV of £500,000 or above |
The RHL multipliers are 5p lower than their non-RHL equivalents. The Government describes this as a permanent structural tax cut for the retail, hospitality and leisure sector, worth nearly £1 billion per year and benefitting over 750,000 properties.
A worked example
Suppose you own a high-street shop with a rateable value of £28,000. As a retail property below £51,000, the small business RHL multiplier of 38.2p applies. Your basic annual bill is £28,000 × 0.382 = £10,696. If the same property were an office (non-RHL), the small business non-RHL multiplier of 43.2p would apply, giving a bill of £12,096. The difference is £1,400 per year.
Who Pays Business Rates?
The occupier of a non-domestic property is normally responsible for paying business rates. If you run a business from a shop, office or warehouse, you pay the rates on that premises. If the property is empty, the owner (usually the landlord or freeholder) becomes liable after an initial relief period.
This is a critical point for landlords: if your property is vacant, you are paying the rates out of your own pocket with no rental income to offset the cost.
Reliefs and Exemptions
The raw bill calculated from rateable value and multiplier is rarely the final amount you pay. A range of reliefs can reduce your bill substantially, or even eliminate it entirely.
Small Business Rate Relief (SBRR)
This is the most common relief. If your property has a rateable value of £12,000 or less and it is the only commercial property your business uses, you pay no business rates at all. For rateable values between £12,001 and £15,000, the relief tapers from 100% down to 0%. A property with a rateable value of £13,500 receives roughly 50% relief.
From 1 April 2026, businesses that acquire a second property can retain SBRR on their original premises for 36 months (previously 12 months). This extended grace period applies to businesses expanding from 27 November 2024 onwards.
Retail, Hospitality and Leisure (RHL) Relief
From 2026/27, the temporary RHL relief (which provided 40% off bills in 2025/26) has expired. However, the Government has replaced it with a permanently lower multiplier for RHL properties, as described above. The effect is a built-in discount of 5p per pound of rateable value compared to non-RHL businesses.
Pubs and Live Music Venues Relief
For 2026/27 only, qualifying pubs and live music venues with a rateable value below £500,000 receive an additional 15% relief. This stacks on top of the lower RHL multiplier.
Transitional Relief
The revaluation means some properties face large bill increases. The Government’s £3.2 billion Transitional Relief scheme caps how much your bill can rise in any one year. For 2026/27, the caps are:
- Small properties (RV up to £20,000, or £28,000 in London): maximum 5% increase
- Medium properties (RV £20,001 to £100,000): maximum 15% increase
- Large properties (RV above £100,000): maximum 30% increase
If your new bill would be more than these caps above your previous bill, the excess is phased in over subsequent years.
Supporting Small Business Relief (SSBR)
If you were receiving SBRR, Rural Rate Relief, the 2023 SSBR, or RHL relief on 31 March 2026 and you lose that relief at the revaluation, the SSBR scheme caps your annual increase at £800 or the relevant transitional relief percentage (whichever is greater). This prevents a sudden cliff-edge jump for small businesses that fall out of relief eligibility.
Other reliefs
Charitable rate relief (80% mandatory for registered charities), rural rate relief, and hardship relief also exist. Your local council may offer additional discretionary reliefs. It is always worth asking your billing authority what is available.
Empty Property Relief: The Rules for Vacant Buildings
This is where things get particularly important for landlords and property investors. When a commercial property becomes empty, the owner receives a temporary exemption from business rates:
- Standard properties: 3 months rates-free from the date the property becomes empty
- Industrial properties (warehouses, factories): 6 months rates-free
After this initial exemption expires, you pay full business rates on the empty property at the same rate as if it were occupied. There is no discount for the property being vacant.
Resetting the relief period
Empty Property Relief can be reset by putting the property back into genuine occupation for a continuous period of at least 13 weeks (since April 2024, up from the previous 6 weeks). Once 13 weeks of genuine occupation is completed, the property can become empty again and a new 3-month (or 6-month) rates-free period begins.
This is where VacatAd’s service sits. We establish genuine beneficial occupation through technology infrastructure (public Wi-Fi and local advertising platforms), satisfying the legal test for occupation under current case law. This allows landlords to legally cycle between occupied and empty status, maximising the proportion of each year that is rates-free.
The maths of empty property relief cycling: For a standard property, VacatAd’s model creates 13 weeks of genuine occupation followed by 13 weeks of rates-free empty status, repeated throughout the year. That means approximately 26 weeks of each year are rates-free, rather than only the first 13 weeks after vacancy. For industrial properties with a 6-month exemption, the savings are even larger.
The 2026 Revaluation: What Changed
Every few years, the VOA revalues all commercial properties to bring rateable values in line with current market rents. The 2026 revaluation is based on rental evidence from 1 April 2024 and replaces the 2023 rating list (which was based on April 2021 values).
Nationally, rateable values rose by 19.2% on average. But the picture varies enormously by location and sector. Areas where commercial rents grew strongly between 2021 and 2024 saw the biggest rateable value increases. Some properties in areas with declining rents may have seen their rateable values fall.
If you believe your property’s rateable value is wrong, you can challenge it through the VOA’s Check, Challenge, Appeal process. This starts with a Check (verifying the facts the VOA holds about your property), then a formal Challenge if you disagree with the valuation, and finally an Appeal to the Valuation Tribunal if the dispute is not resolved.
Duty to Notify (New from 2026)
A new obligation begins piloting from 1 April 2026. Under the Duty to Notify provisions of the Non-Domestic Rating Act 2023, ratepayers will be required to register on the Government Gateway and inform the VOA of any changes to their property within 60 days. Annual confirmation returns will also be required, verifying that the VOA’s data remains accurate. Non-compliance will carry financial penalties.
The pilot starts with a small group of ratepayers in April 2026, with full implementation expected by April 2029.
How to Calculate Your Bill
The basic formula is straightforward:
Annual Bill = Rateable Value × Multiplier − Any Reliefs
For example, a warehouse (non-RHL) with a rateable value of £45,000, occupied by a business with no other properties:
- Rateable value: £45,000
- Multiplier: 43.2p (small business non-RHL, as RV is below £51,000)
- Basic bill: £45,000 × 0.432 = £19,440
- SBRR: not eligible (RV exceeds £15,000 threshold)
- Final annual bill: £19,440
Rather than working through this manually, you can use our free Business Rates Calculator, which applies all five multipliers, checks every relief, and shows your estimated annual bill, monthly cost, and potential savings in seconds.
How to Reduce Your Business Rates Bill
There are several legitimate strategies for reducing what you pay:
Check your rateable value. If the VOA’s assessment is based on incorrect information (wrong floor area, property type or condition), your rateable value may be too high. Start by checking the facts on the VOA website and lodge a Check if anything is wrong.
Claim every relief you are entitled to. SBRR, RHL relief, charitable relief and hardship relief are all available but not always applied automatically. Contact your local billing authority to confirm you are receiving everything you qualify for.
For vacant properties, use beneficial occupation. As explained above, genuine occupation resets your Empty Property Relief period. VacatAd’s technology-driven model does this compliantly, with a 100% success rate across 250+ UK properties, reducing your holding costs substantially while the property is between tenants.
Review your property’s RHL status. If your property is used for retail, hospitality or leisure purposes, make sure your billing authority has categorised it correctly. The 5p multiplier difference can save thousands per year.
Key Dates for 2026/27
- 1 April 2026: New rateable values, five-tier multipliers, and redesigned transitional relief all take effect
- April 2026: Duty to Notify pilot begins with selected ratepayers
- 17 April 2026: Vacant Commercial Properties (Temporary Use) Bill second reading in Parliament
- April 2027: Year 2 transitional relief caps apply (rates TBC)
- April 2029: Next scheduled revaluation (based on April 2027 rental values); full Duty to Notify rollout expected
Get Your Free Assessment
If you own or manage vacant commercial property, the 2026/27 rates year is the right time to take action. Use our Business Rates Calculator to see your estimated bill and potential savings instantly, or contact our team for a free, no-obligation assessment of your property or portfolio.
VacatAd has helped landlords across 250+ UK properties reduce their empty rates liability through compliant, technology-driven beneficial occupation. Call us on 0333 090 0443 or email hello@vacatad.com.