Blog | by Rob Young | November 2026
Business Rates in 2026/27: Who Pays, How Relief Works and What the Budget Changed
Rob Young
“Who pays business rates” has been one of the fastest-rising searches in the UK this week and it is not hard to see why: the Autumn Budget on 28 October confirmed further business rates changes, mostly from April 2027, and most people who move into their first shop, office or workshop have never had to work out a rates bill before. Here is how the system works in 2026/27, and what the Budget changed.
What are business rates and who actually has to pay them?
Business rates are the property tax charged on most non-domestic premises in England: shops, offices, warehouses, workshops, and most other buildings used for a trade. The bill is not based on profit or turnover. It is based on the property's rateable value (RV), a figure the Valuation Office Agency sets to reflect roughly what the premises would rent for, and that RV is then multiplied by a rate set each year by central government.
Liability generally falls on whoever occupies the property, usually the tenant, and the bill comes from your local council rather than HMRC, which is why rates can feel like a different system entirely from the rest of your tax affairs. If you run your business entirely from home and only use a room or two for work, you typically will not pay business rates on that address at all. A self-contained outbuilding or converted garage used solely for the business is the kind of thing that can get rated separately, so it is worth checking before you convert one.
How much will I actually pay in 2026/27?
From 1 April 2026, the standard multiplier is 48.0p (49.0p including the new 1p Transitional Relief Supplement) for properties with a rateable value between £51,000 and £499,999. Smaller premises, up to £50,999 RV, use the lower small business multiplier of 43.2p (44.2p with the supplement). Qualifying retail, hospitality and leisure premises get their own, lower pair of multipliers again: 38.2p and 43.0p (39.2p and 44.0p with the supplement).
The table below shows how that plays out before any relief is applied, using the small business and standard multipliers as an example.
| Rateable value | 2026/27 multiplier | Typical relief available |
|---|---|---|
| Under £12,000 | 43.2p (small business) | 100% Small Business Rate Relief |
| £12,001 to £15,000 | 43.2p (small business) | Tapered relief, 100% down to 0% |
| £15,001 to £50,999 | 43.2p (small business) | None, but lower multiplier still applies |
| £51,000 and above | 48.0p (standard) | None |
Could Small Business Rate Relief wipe out my bill completely?
If your premises has a rateable value under £12,000, you are entitled to 100% Small Business Rate Relief, meaning no bill at all. Between £12,001 and £15,000, relief tapers steadily from 100% down to 0% rather than cutting off sharply, so a property around £13,500 RV gets roughly half relief rather than none. Above £15,000 you lose SBRR entirely, though you still benefit from the lower small business multiplier up to £50,999 RV.
There is one genuinely useful change already locked in for growing businesses: the grace period that lets you keep relief on your original premises while taking on an additional property has been extended from twelve months to three years, for premises taken on from 27 November 2025. If you are opening a second site, that is worth raising with your council directly rather than assuming the old twelve-month rule still applies.
What did the Autumn Budget change?
The Autumn Budget on 28 October confirmed changes that mostly start on 1 April 2027, so nothing in the table above changes for 2026/27. For 2027/28 the standard multiplier rises to 49.7p and the small business multiplier to 44.7p, with the lower retail, hospitality and leisure multipliers at 44.7p and 39.7p. The 1p Transitional Relief Supplement is extended to 2027/28 and 2028/29.
For qualifying retail, hospitality and leisure premises only, the Small Business Rate Relief thresholds rise from £12,000 and £15,000 to £18,000 (full relief) and £21,000 (relief tapers to nothing) until 31 March 2029. Everyone else stays on £12,000 and £15,000. Qualifying retail, hospitality and leisure bills will also be capped at CPI inflation in 2027/28 and 2028/29, relief for pubs and live music venues rises from 15% to 35%, vape shops lose Small Business Rate Relief and adult gaming centres are excluded from the higher thresholds. The aggregate rateable value threshold for second and further properties becomes a single £29,999 across England until 31 March 2029.
The government says regulations and guidance will follow, so check with your council before relying on these figures for your own premises.
What should you check or do now?
- Confirm your premises' current rateable value with the Valuation Office Agency and check it still matches how you actually use the building.
- If you are near the £12,000 or £15,000 boundary, work out roughly where tapered relief leaves you rather than assuming an all-or-nothing outcome.
- If you are taking on a second premises, ask your council whether the extended three-year grace period on your existing relief applies to you.
- Check whether your premises counts as retail, hospitality or leisure, because the higher relief thresholds from April 2027 only apply to those premises.
Frequently Asked Questions.
Usually not, if the property is still genuinely your home and you only use a room or two for work. A council can rate part of your home separately if you have created a distinct, self-contained business space, such as a converted outbuilding used solely for trade.
Yes, for some premises. From 1 April 2027 the thresholds rise to £18,000 and £21,000 for qualifying retail, hospitality and leisure premises, until 31 March 2029. They stay at £12,000 and £15,000 for other premises, and for all premises in 2026/27.
It is a lower pair of multipliers (38.2p and 43.0p for 2026/27, rising to 39.7p and 44.7p from April 2027) for qualifying shops, restaurants, pubs and leisure premises, on top of any Small Business Rate Relief you are entitled to. Check with your local council whether your specific trade qualifies, since eligibility is set property type by property type.
Need help?
If you want a second opinion on whether your rates bill has the right multiplier and relief applied, or you are weighing up new premises and want the real cost worked through before you sign a lease, feel free to contact us via our website. This is general information rather than advice, and your council or the Valuation Office Agency can confirm the figures for your specific property.
Book a free consultation: https://loveyouraccountants.com/contact.
Author
Rob Young
Rob is Managing Director at LYA, supporting ambitious businesses to scale with confidence through clear planning and proactive financial insight.
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