The Chancellor has delivered the Autumn Budget for 2026, and we are pleased to set out the main announcements in relation to Business Rates.
In line with the Chancellor’s theme, “Breathing Space today, hope for the future’’, the measures are set against very tight budgetary constraints, with distinct focus on small retail businesses.
Small Business Rates (RHL)
An increased threshold for small business rates relief (SBRR), for Retail, Hospitality and Leisure properties, whereby this is to increase from £12,000 to £18,000 Rateable Value (RV). This is set to equate to some ‘’70,000 more businesses’’ not paying any business rates at all.
Consequently, the usual tapered SBRR relief that was between £12,001 to £15,000 RV will now be applicable to RVs of £18,001 to £21,000.
Gambling and Vape Shops
To fund the expansion to small business rates relief, there are to be higher taxes on gambling and vape shops. Vape shops will specifically be excluded from both the RHL multipliers and SBRR from April 2027, while adult gaming centres are no longer to qualify for the RHL multipliers.
Pubs and Live Venue Relief Increase
Under the current financial year, pubs, social clubs and qualifying live music venues currently receive a 15% relief on their rates bill. From 01 April 2027, this is to increase by a further 20%, arriving at a total relief of 35%.
However, live music venues with an RV of £1M and above are not to receive this additional relief, and instead, the relief is to remain at 15%.
A Two-Year Bill ‘Freeze’ for RHL Properties
For qualifying RHL properties in England, business rates bill increases are to be capped at CPI inflation for 2027/28 and 2028/29, therefore, this is to be a real terms freeze, instead of a cash freeze.
To contribute to funding, the 1p Transitional Relief Supplement is to be extended by a further two years. The supplement is applicable to properties whose rates bills would otherwise increase by less than the caps provided by Transitional Relief and Supporting Small Business Relief.
It is to be noted this does not apply to increases in RVs resulting from improvements, or losses in other reliefs, such as improvement relief, or hardship relief, post 01 April 2026.
Supporting Small Business Scheme Extension
Government is to extend the 2026 Supporting Small Business Scheme in England, to ratepayers who have been receiving support under the 2023 SSB scheme. The extension is to run for one year from 01 April 2027.
Valuation Tribunal Fees
Going forward, Government are to abolish the existing £150 and £300 fees for non-domestic rating appeals to be made to the Valuation Tribunal in England.
In addition, fees paid for any 2026 Rating List appeals, to date, are to be refunded.
Business Rates Retention
It has also been announced that 100% of business rates revenue collected by Local Authorities is to be retained locally by 2030. From next year, 20% of that revenue is to go to Mayors for local spending.
Business rates retention zones are also planned; specific areas where 100% of rates growth is retained, subject to full business case approval.
General Anti-Avoidance Rule (GAAR)
GAAR for business rates in England is to be introduced by Government as soon as possible, following consultation on design and delivery.
Funding Local Authority costs for anti-avoidance legislation
From 01 April 2027, Government are to reimburse local authorities for external legal costs incurred in unsuccessful cases that challenge business rates avoidance and test a point of law.
Business Rates and Investment
Government is to publish findings from the Business Rates and Investment: Call for Evidence, summarising views on how business rates affect investment in England, and setting out the Government’s response.
GLA Business Rates Supplement
Government is to legislate to enable the Mayor of London to establish a successor to the Elizabeth Line Business Rates Supplement with ballot arrangements no more restrictive than the general ballot provisions in the Business Rates Supplement Act 2009, as originally enacted.
Non-Domestic Rating Multipliers
The non-domestic Rating multipliers for 2027/28 are to be as follows:
- Standard – 49.7p
- Small business – 44.7p
- Standard RHL – 44.5p
- Small Business RHL – 39.5p
- High-value – 52.5p
In summary, there is a somewhat positive outlook for small businesses and qualifying RHL properties following the announcement of the new measures. Government have also resisted the temptation to artificially increase the multiplier for properties with an RV of £500,000 or greater, which is perceived to fall under the larger business bracket. Albeit, the extension of the 1p Transitional supplement is to be unwelcome for a proportion of ratepayers. An interesting area is the GAAR consultation and funding for Local Authority costs for anti-avoidance legislation In England. Following what has gone before in Scotland and Wales, very much watch this space…
Visit our Business Rates Services page to see how we can help with your requirements.
Authors: Stephen White, Partner, Debbie Warwick, Equity Partner, Aoife Scanlon, Partner
