Relief withdrawn
The existing 40% retail, hospitality and leisure discount is being withdrawn.
The system is changing. The unfairness is not.
Businesses in England receive revised business-rates bills for 2026–27 following a new revaluation and a major change to reliefs and multipliers.
The Government has recognised that exposed sectors need support. But temporary discounts and transitional schemes do not fix the deeper problem: businesses that need physical premises are still taxed heavily before they make a sale or a profit.
Four changes landing together
Each change matters on its own. Together, they create a sharp adjustment for the businesses that make up much of Britain’s high streets.
Values rise
Properties have been revalued, with rateable values rising by an average of 19.2%.
Multipliers fall
National multipliers have been reduced to reflect the revaluation.
RHL gets 5p
RHL firms receive a 5p lower multiplier, funded by a 2.8p surcharge on properties valued above £500,000.
A smaller discount does not replace what is being lost
The 5p reduction was a step in the right direction. On 23 July 2026, the Government went further, announcing an additional 20% cut in business-rates bills for eligible pubs, social clubs and smaller live music venues from April 2027. That support is welcome, but it remains tightly targeted. Restaurants, hotels and much of the wider hospitality sector are not covered by the new 20% cut, while retailers receive no equivalent additional support. The announcement therefore eases pressure for some businesses without resolving the wider imbalance facing premises-based firms.
UKHospitality described the announcement as a welcome first step but called for a sector-wide solution, noting that restaurants are under similar pressure and that hotels face particularly sharp increases. Retail bodies have also warned that shops risk being overlooked as closures and job losses continue across the high street.
Instead, small retail, hospitality and leisure firms face an average 52% increase in bills over three years, phased in through transitional relief.
A small shop or restaurant whose rateable value rises from £16,000 to £19,104 sees its bill rise from £4,790 in 2025–26 to £7,297 by 2028–29, including a 16.7% increase in year one.
Confidence is already collapsing
The sectors most exposed to business-rates changes are also among the least confident about the year ahead.
Shared workspaces are being pulled into the system
Following a recent legal ruling, the Valuation Office Agency has begun rating some shared office buildings as a single premises rather than by individual desk or unit.
That can push the overall rateable value above the Small Business Rate Relief threshold, leaving the small firms and sole traders inside unable to qualify.
Shared workspaces are often the first step a business takes when moving beyond a home setup. Adding thousands of pounds to that step risks stunting firms precisely when they are ready to grow.
Useful adjustments — not structural reform
The 2025 Budget included practical improvements for some firms. These are welcome, but they manage the transition rather than resolving the wider unfairness of the system.
The Small Business Rate Relief grace period has been extended from one year to three years after a firm takes on a second property.
The Supporting Small Business scheme has been extended and widened to cover firms losing retail, hospitality and leisure relief.
Eligible 2026–27 bill increases are capped at £800 under the scheme.
The Government is right to recognise that particular sectors need help. But targeted financial support cannot substitute for a business-rates system that is fair by design.
Businesses need reform, not another temporary patch
Rethink the Rates is gathering evidence from employers and communities to build the case for a fairer, more predictable system that supports premises-based businesses, investment and jobs.