Business Rates Reform 2026 Are You Eligible for the New Multiplier?

What are Business Rates

Business rates are a tax charged on most non-domestic properties in the UK. If your business occupies a property such as an office, shop, warehouse, restaurant, factory or other commercial premises, you may have to pay business rates to your local council.

Business rates are sometimes described as the commercial equivalent of council tax. However, unlike council tax, which is generally paid by households, business rates apply to properties used for business and other non-domestic purposes.

The amount you pay depends primarily on the rateable value of your property and the business rates multiplier set by the government.

Who has to Pay Business Rates?

Businesses that occupy non-domestic premises will usually be responsible for paying business rates. This can include:

Shops and retail premises
Offices
Warehouses and industrial units
Restaurants, cafés and pubs
Factories and workshops
Hotels and other accommodation
Some home-based businesses
Other commercial or non-domestic properties

In some circumstances, you may still have a business rates liability even if you do not operate from a traditional commercial property.

If you rent a business property, the business rates are generally paid by the occupier rather than the landlord, although the terms of your lease should be checked carefully.

What has Changed in 2026?

Until 31 March 2026, hospitality, leisure and retail businesses (HLR) could apply for a 40% discount on their business rate bills each year, capped at £110,000. That temporary relief scheme has now ended and been replaced with a permanent system of lower tax rates for those businesses that qualify.

Prior there were only two business rate multipliers, basically two different tax rates that determined how much a business paid. Since 1 April 2026 there are five, and the one that applies to your business depends on both the type of property you occupy and its rateable value.

The major difference is that under the old system business had to apply for relief each year with no guarantee It would be renewed. The new lower rates for these businesses are now here to stay, giving businesses a lot more certainty when planning ahead.

The New Multipliers from April 2026

Business rates are calculated by multiplying your property’s rateable value by a figure called a multiplier, it’s basically a tax rate applied to your property. Hence the lower the multiplier, the less tax you pay. From April 2026 the multipliers have been:

Small hospitality, leisure, and retail businesses with a rateable value under £51,000: 38.2p.
Small non-HLR business with a rateable value under £51,000: 43.2p.
Standard hospitality, leisure, and retail businesses with a rateable value between £51,000 and £499,999: 43p.
Standard non-HLR businesses with a rateable value between £51,000 and £499,999: 48p.
High value businesses with a rateable value of £500,000 or more: 50.8p.

Businesses that qualify pay 5p less per pound than comparable non-HLR businesses. Across the sector as a whole, this represents a permanent tax cut worth almost £1 billion a year, which will benefit over 750,000 properties.

Who Qualifies?

In order to benefit from the lower HLR multipliers your property needs to be mainly used for one of the following purposes:

Hospitality: Selling food & drink, or providing accommodation such as hotels of holidays lets.
Leisure: Offering community, cultural or recreational facilities.
Retail: Selling or hiring goods, or providing a service to members of the public who visit in person.

Properties with a rateable value of £500,000 or more don’t qualify for the lower HLR multipliers regardless of how they’re being used, and will pay the higher 50.8p rate instead. This means larger flagship stores, major venues, and big hotels will pay more, with the savings more concentrated to smaller businesses.

The 2026 Revaluation

At the same time as these multiplier changes, all commercial properties in England received new rateable values from 1 April 2026, based on rental values as of April 2024. This means your bill may have changed for a few reasons, your multiplier may be lower but your rateable value could still be higher, or vice-versa.

For certain businesses, especially those whose rateable values increased significantly, the lower multiplier might not fully offset the rise in rateable value. This is why it’s important to actually check your 2026/27 bill rather than simply assume it has gone down. Transitional relief is also an option to cap large increases for businesses that have been hit hard by the revaluation.

Additional Relief for Pubs and Live Music Venues in 2026/27

In addition to the lower multipliers, pubs and live music venues received an additional 15% discount on their business rate bills for 2026/27, announced in January 2026. This is applied on top of any other eligible reliefs the business has, and in most cases has automatically been applied by local councils. If you run a live music venue or pub and this hasn’t appeared on your bill, you should contact your local authority.

What’s Next? Burnhams’s 20% Cut From 2027/28

New Prime Minister Andy Burnham announced on 23 July 2026 that live music venues, clubs, and pubs will receive an additional 20% cut to their business rates from 2027/28, on top of the existing support already implemented. The government estimates this will save an average pub around £1,100 a year, a figure that may seem small in the grand scheme of things but will make a difference to the majority of struggling pubs.

The relief is expected to benefit nearly 32,000 venues across the country and will be funded by reviewing tax reliefs for businesses considered to be harmful to communities such as betting and vape shops. However, the biggest live music venues such as arenas will not qualify, with further details to be confirmed at the Budget.

The new PM described these implementations as a ‘first step’ in supporting the sector, suggesting further change may follow.

What you should do now

Check your 2026/27 business rate bill and see which of the multiplier apply to your property.
If you think you do qualify for the HLR multiplier but it has not been applied, contact your local council.
If you run a live music venue or pub, check the 15% relief has been applied. If not, contact your local billing authority.
If you think your rateable value is wrong following the 2026 revaluation, you can challenge it through the Valuation Office Agency.

To summarise

The April 2026 business rate reform is one of the most significant changes to the system in years. For most hospitality, leisure, and retail businesses with properties valued under £500,000, the shift to permanently lower multipliers is good news, especially compared to the uncertainty around the old annual relief scheme. With further support now confirmed for live music venues and pubs under the new government, it certainly seems there is going to be some more backing for high street businesses. So, if you haven’t reviewed your 2026/27 bill, now is definitely the time to do so.