Business Rates Changes from April 2026: What Retail, Hospitality and Leisure Businesses Need to Know

From 1 April 2026, business rates changed significantly for retail, hospitality and leisure businesses in England.

The previous 40% retail, hospitality and leisure (RHL) relief for 2025/26, capped at £110,000 per business, ended on 31 March 2026. It has been replaced by lower RHL multipliers for qualifying occupied properties with a rateable value below £500,000. At the same time, the 2026 revaluation came into effect, using rateable values based on rental values at 1 April 2024.

That means your bill may have changed for more than one reason. Your multiplier may be lower, your rateable value may be higher or lower, and you may also be affected by transitional relief, Supporting Small Business Relief or the 1p transitional relief supplement.

A separate 15% relief also applies to eligible pubs and live music venues for 2026/27, and the Small Business Rate Relief grace period has been extended for businesses expanding into a second property.

If you run a shop, café, restaurant, pub, gym, hotel or another RHL property in England, it is worth checking your 2026/27 bill carefully rather than assuming the council has applied everything correctly.

This guide explains what has changed, who qualifies for which multiplier, what to check on your bill, and how to plan around the new figures.

The five new multipliers at a glance

The single biggest change is that there are now five national non-domestic rating multipliers in England instead of two. Which one applies to your property depends on how it is used and the rateable value band it falls into.

The lower RHL multipliers apply only to eligible RHL properties with rateable values below £500,000. Properties with a rateable value of £500,000 or more use the high-value multiplier, even if they are used for retail, hospitality or leisure.

The intention is to give lower multipliers to eligible high street and consumer-facing businesses, while higher-value properties contribute more. If you are unsure where your property sits, your council should be able to confirm the multiplier applied to your bill. Working with experienced accountants Nottingham businesses rely on can help you check whether the multiplier and reliefs on your demand are correct.

What happened to the old RHL relief

The temporary 40% RHL discount for 2025/26 ended on 31 March 2026. From 1 April 2026, the new RHL multipliers apply instead for qualifying properties.

This matters because the new lower multipliers do not simply replicate the old 40% discount.

For example, in 2025/26, the small business multiplier was 49.9p. A 40% RHL discount effectively reduced that charge to around 29.94p before any other reliefs. In 2026/27, the small business RHL multiplier is 38.2p. That is lower than the non-RHL small business multiplier, but it may still produce a higher bill than the previous year once the old 40% relief has gone.

For larger RHL occupiers with rateable values from £51,000 to £499,999, the standard RHL multiplier is 43.0p. This is lower than the non-RHL standard multiplier of 48.0p, but again, the final bill depends on the new rateable value, reliefs and any transitional support.

That is why modelling your bill under the new rules is essential before setting prices, reviewing margins or agreeing budgets for the year. Our piece on allowable expenses for limited companies is a useful refresher if you are reviewing the full cost base at the same time.

A fresh revaluation landed on the same day

The other half of the story is the 2026 revaluation. The Valuation Office Agency updates rateable values for non-domestic properties in England and Wales, and the new 2026 list took effect on 1 April 2026.

For the 2026 revaluation, rateable values are based on rental values at 1 April 2024.

That means two changes hit your bill at once:

• A new multiplier system
• A new rateable value

Even if your rateable value has risen, your final bill may be softened by the lower RHL multiplier or by reliefs. The reverse can also happen: a lower multiplier may not be enough to offset a higher rateable value or the loss of the previous 40% RHL relief.

The safest approach is to check your new rateable value, review the multiplier applied, and compare the final 2026/27 bill with your actual 2025/26 bill after reliefs. Our UK Spring Budget 2026 summary has the wider tax backdrop for the year ahead.

A 15% relief for pubs and live music venues

Eligible pubs and live music venues in England receive a 15% business rates reduction for the 2026/27 financial year.

This relief applies to occupied properties that meet the eligibility criteria, broadly where the property is wholly or mainly used as a pub or live music venue. It is applied after any transitional relief or Supporting Small Business Relief.

The government has also announced that eligible pubs and live music venues will have their business rates bills frozen in real terms in 2027/28 and 2028/29, with separate guidance to follow for those later years.

If you are a tenant licensee paying business rates directly, this could be one of the most important changes on your 2026/27 bill. Multi-site operators should check each property individually because business rates are applied at hereditament level, not simply at group level. For multi-site operators looking for better day-to-day visibility on which sites are performing, our management accounts that directors use article is a worthwhile read.

Small Business Rate Relief: the three-year grace period

The Small Business Rate Relief grace period has also been extended.

Previously, when a business taking Small Business Rate Relief expanded into a second property, it could usually retain relief on the first property for 12 months. For businesses expanding after the Budget, with effect from 27 November 2025, that grace period has been extended to three years.

For independent retailers and hospitality operators thinking about a second unit, that extra time can make expansion easier to plan. It gives the business longer to stabilise the second site before losing relief on the first property.

Pair that with a careful plan and clean management accounts, and the move becomes easier to underwrite. If you are still in the planning stages, our accountant for startup business team works with new ventures on exactly this kind of decision, and our business start-up accountants page sets out the full new business support package.

Transitional relief and the 1p supplement

The 2026 revaluation includes transitional support to soften the impact of large bill increases.

The government has introduced a redesigned transitional relief scheme worth £3.2 billion. There is also a 2026 Supporting Small Business Relief scheme, which helps ratepayers losing some or all of their Small Business Rate Relief, rural rate relief, RHL relief or 2023 Supporting Small Business Relief.

For eligible businesses, bill increases are capped at the higher of £800 or the relevant percentage cap for the 2026/27 year. The percentage cap depends on the property’s rateable value band.

There is also a 1p transitional relief supplement for 2026/27. This applies to ratepayers who do not receive transitional relief or Supporting Small Business Relief, and it is designed to help fund transitional relief.

The supplement should be shown clearly on your bill. If you receive transitional relief or Supporting Small Business Relief, the supplement should not increase what you pay because it should be offset through the relief calculation. Check your demand carefully when it arrives.

Tight cash flow planning matters more than ever in this transitional year, and the principles in our landlord cash flow mastery post apply just as well to RHL operators.

Other changes worth flagging

Several smaller changes complete the picture for 2026/27:

• A 10-year 100% business rates relief applies to eligible electric vehicle charging points that are separately assessed by the VOA, and to electric vehicle-only forecourts.
• The 2026 Supporting Small Business Relief scheme has been expanded to include ratepayers losing RHL relief.
• The 2023 Supporting Small Business scheme has been extended for a further year from 1 April 2026.
• The Crossrail Business Rates Supplement threshold in London has increased from £75,000 to £92,000 from April 2026.
• Councils are responsible for applying the correct multiplier and reliefs, but they may contact businesses where they need more information about how a property is used.

If you operate from a mixed-use site, or you let part of your property to another trader, the use designation question can become fiddly. Our guide on mixed use and multi block schemes is a useful starting point on apportionment, and the related piece on apportionment methods explained goes deeper on the mechanics.

What retail businesses should do now

For independent shops and high street retailers, the priorities are simple:

• Check your new rateable value on the VOA record and compare it with your last bill.
• Confirm with your council which of the five multipliers has been applied.
• Check whether Supporting Small Business Relief applies if your bill has risen because of the revaluation or loss of RHL relief.
• Re-forecast your 2026/27 rates cost and update your budget accordingly.
• Review your pricing and margin per square foot now that the relief has shifted shape.
• Ensure your bookkeeping captures the new rates expense line cleanly. Our bookkeepers Nottingham team handle exactly this kind of setup for retail clients.

If you are still on spreadsheets, this is a good moment to move across. Our from spreadsheets to Xero guide and our Xero bookkeeping basics walkthrough will get you up and running. Cloud accounting also makes the receipt and supplier invoice side easier, and our receipt capture workflow post explains how to set that up.

What hospitality businesses should do now

Cafés, restaurants, hotels, takeaways and event venues have a slightly different list:

• Confirm whether your business meets the RHL eligibility criteria and whether the property is being treated as a qualifying occupied property.
• If you run a pub or live music venue, check whether the 15% relief has been added to your bill.
• Look at your wider tax position, including VAT, where threshold pressure remains a live issue. Our HMRC VAT inspections piece flags what inspectors are looking at, and the VAT registration for growing businesses post sets out the decision points.
• Review fixed costs against your new rates expectation, including any rent reviews or service charge demands.
• Tighten up bank reconciliation and weekly cash control. Our Xero bank reconciliation and automations in Xero articles cover the practical setup.

If you serve short-stay or holiday accommodation, do not assume the business rates position is the same as a standard hotel or guesthouse. Our piece on short term lets and HMOs accounting is worth a read, and the earlier change covered in furnished holiday lettings regime abolished still affects the income tax side of the business.

What leisure businesses should do now

Gyms, soft play centres, bowling venues, golf driving ranges, cinemas and similar venues may fall within the leisure category, depending on the property’s actual use.

Your action list looks like this:

• Verify the use designation on your property record.
• Check whether the council has treated the property as RHL-eligible.
• Review whether any part of the site has a different use or separate assessment.
• Plan for higher capital cost recovery if you are investing in equipment refresh. Our capital allowances on property piece explains where the reliefs sit.
• Build a monthly close routine so you can see early signals in your numbers. Our month end in Xero walkthrough covers the steps end to end.

For larger leisure groups with mixed ownership models, including landlord and tenant arrangements on the same site, our accounting property management service handles the financial reporting side, and our experienced accountant landlord team supports the property ownership side. Specialist property tax accounting advice is also available for trickier ownership structures.

Cash flow and accounting implications

Whichever sector you are in, the practical knock-on effects are similar:

• Your monthly rates accrual figure may have changed and needs updating in your cloud accounting setup.
• Your cash flow forecast needs to reflect the new bill, the timing of any transitional relief and the position of the 1p supplement on your account.
• If you are presenting numbers to a lender, your forecast should show pre-change and post-change positions clearly. Our Xero reporting packs for lenders guide is built around exactly this conversation.
• Internal controls become more important when rates costs move materially. Our Xero controls and user permissions piece is worth a glance.
• For RHL groups with multiple companies, your confirmation statement and what are statutory accounts routines remain unchanged, but the rates expense line in your accounts needs accurate restatement.

If you would rather not run all of this in-house, our xero bookkeeping services cover the day-to-day, and for larger operators our outsource financial services team takes care of bookkeeping, payroll, management reporting and statutory submissions under one roof. The wider case for outside support is set out in our benefits of outsourcing your accountant post.

Frequently asked questions

Will my business rates bill go up or down in 2026/27?

It depends on your new rateable value, the multiplier applied, and any reliefs you are eligible for. Some RHL occupiers may benefit from the lower multiplier, but the loss of the 40% RHL relief and any increase in rateable value can offset that. Model the full bill before assuming you will save money.

Do I have to do anything to get the new RHL multiplier?

Your council determines which multiplier applies based on property use and government guidance. If you believe your property qualifies for an RHL multiplier and your bill suggests otherwise, contact the council and provide evidence of how the premises is used.

What happens to my Small Business Rate Relief if I take on a second property?

For businesses expanding after the Budget, with effect from 27 November 2025, the grace period for retaining Small Business Rate Relief on the first property has increased from one year to three years. You still need to check the wider SBRR conditions and your council’s treatment of the second property.

Is the 15% pub and live music venue relief automatic?

Many councils apply it automatically where eligibility is clear, but it is still worth checking your demand. The relief applies to eligible occupied pubs and live music venues in England for 2026/27 and is applied after transitional relief or Supporting Small Business Relief.

Does this affect Scotland, Wales or Northern Ireland?

The five multiplier system covered in this article applies in England. Scotland, Wales and Northern Ireland operate their own non-domestic rates regimes, so check local guidance if your property is outside England.

How do I challenge my new rateable value?

You usually start through the VOA’s Check, Challenge, Appeal process. Evidence of comparable rents around the 1 April 2024 valuation date is important. Professional support is usually worth considering where the value is material or the evidence is complex.

Can my accountant deal with all of this for me?

Yes. Most RHL operators ask their accountant to model the impact, reconcile the council demand against the calculation and flag any obvious errors. We do exactly that for clients across the East Midlands.

Ready to plan your 2026/27 rates position with a clear head

The 2026 business rates reset is one of the biggest changes high street businesses have seen in years. The businesses that come out ahead will be the ones that move from reactive to proactive and check their bills properly.

If you would like a second pair of eyes on your bill, your cash flow or your wider tax position, our team works with retail, hospitality and leisure operators across Nottingham and nationwide. Call us on 0115 648 8686 or get in touch through our website to book a free conversation about what the changes mean for your numbers.

Kellee Quigley

I lead FHP Accounting, an accountancy practice specialising in Commercial and Residential Property Accounting. Our goal is to make the administration of running property portfolios easier for landlords, managers, and investors — allowing you to focus on what you do best, while we take care of everything behind the scenes.