Get to know upcoming changes to the Business Rates Multiplier

Many are aware that business rates are a significant cost for both occupiers and landlords, so understanding how they’re calculated is key to managing liabilities and planning ahead. One of the most important components of your business rates bill is the multiplier, and with the upcoming 2026 Rating Revaluation, the system is set to change.

Here’s what you need to know.

What is the Business Rates Multiplier?

The multiplier is the number your property’s rateable value (RV) is multiplied by to calculate your business rates charge. It’s updated annually and varies depending on the size of your property.

For the 2025/26 financial year:

• The Standard Multiplier is 0.555 (or 55.5p per £1 of RV)
• The Small Business Multiplier is 0.499, available for properties with an RV under £51,000

What’s Changing in 2026?

The 2024 Autumn Budget confirmed plans to support small retail, hospitality, and leisure (RHL) businesses by introducing a lower multiplier for these sectors. To fund this, a higher multiplier will apply to properties with a rateable value of over £500,000, will start from 1 April 2026.

This means:

• A new RHL Multiplier could be up to 0.2 lower than the Small Business multiplier
• A Large Property Multiplier could be up to 0.1 higher than the Standard multiplier

The government has only set the range for these multipliers so far, and the exact values will be confirmed in future announcements.

To give an idea of the impact on demands, you can see some examples below if the maximum values were applied to a bill today:

*Receiving retail relief

What We Know (and Don’t Know)

Many details of how this will work in practice are unknown and to be announced from the Autumn statement, and we are yet to understand:

• The final definitions of RHL properties
• Whether the Large Multiplier will apply across all property types
• Whether empty properties or those on the Central Rating List will be included

What we do know is that the Large Multiplier must fund the RHL discount. This creates a balancing act for the government: should they maximise support for RHL properties, or limit the burden on large property occupiers and landlords?

What Might This Look Like?

Analyzing predicted 2026 revaluation RVs, we believe the maximum 0.1 increase for ‘Large’ properties is unlikely as it could generate up to £2.9 billion extra revenue, far more than the most generous RHL multiplier scheme could cost.

There is currently intense pressure on the government to maintain a similar level of savings for the High Street (40%). This would be reasonably affordable for the government when limited to smaller retailers.

Therefore, a plausible RHL multiplier scheme could involve a reduction in the multiplier of -0.2 for those businesses that sit in the ‘Small Business’ multiplier band. This would then give them that 40% discount.

Consequently, larger RHL businesses that sit in the ‘Standard’ multiplier band would be more exposed and hypothetically could receive a smaller reduction in comparison of -0.1 in their multiplier, which would be a 20% reduction in business rates liability. A simple scheme like this would add just two multipliers and keep things fairly straightforward.

Assuming the above, this could be funded by a 0.03–0.04 increase in the Large Property Multiplier.

However, be aware the above is just one model; the government can set multipliers based on any criteria they like. They do not have to synchronise the retail multipliers with current small and standard bands, for example they could effectively recreate the current regime by setting the 0.2 reduction to all RVs less than £500,000 and include rules limiting the relief each business can receive.

So, what would our simple model look like in practise (adjusting this year’s multipliers and charges to compare)?

*Receiving retail relief

Winners:

• The 0.2 reduction is very similar to the current 40% retail relief scheme, so small retailers will see little difference, however the new scheme offers more stability with less scope for local authority discretion.
• Medium-Large retail properties that do not currently receive retail relief stand to gain the most from this change, if the new multiplier reduction is more broadly applied than the current discretionary scheme.

Losers:

• Properties currently in the standard multiplier band that receive retail relief could have the most to lose if the current 40% retail relief they enjoy is replaced with a less generous multiplier reduction.
• Large properties above the £500,000 RV limit would usually face the largest total increase, although this could be less than a 10% liability increase.

Overall, given the expected drop in the Standard Multiplier following the 2026 revaluation, we anticipate the Large Multiplier will settle around 0.54–0.55 (54-55p), which is similar to this year’s rate.

It may even be politically tempting for the Government to retain the current 0.555 multiplier as the new Large Multiplier and market this as everyone else receiving a reduction!

Conclusion

We predict smaller and larger businesses are likely to be charged a fairly similar proportion of their RV in 2026 when compared to 2025. The most significant point of uncertainty is for those businesses that sit in the middle, which will lose their 40% relief. It remains to be seen how generous their multiplier reduction will be in the 2026 Rating Revaluation as part of the new RHL scheme, with some potentially being better off, and others being worse off.

Whatever the size of your business, understanding these changes is essential.

We’re here to help you navigate these changes. Our Business Rates team, along with our standard surveying, mitigation and administrative services, have the expertise to work with you to:

• model potential future changes;
• plan ahead to mitigate their impacts; and
• review both past and present legislation and case law for applicability to your portfolio to ensure you’re not paying more than necessary. 

Get in touch to speak with one of our experts: https://www.danielwatney.co.uk/services/find-a-service/business-rates