Business rates, also known as non-domestic or commercial rates, are charged on most non-domestic premises, including commercial properties such as shops, offices, pubs, warehouses and factories, as well as holiday rental homes or guest houses.
People who use a part of a building for non-domestic reasons may also have to pay business rates.
Every three years, business rates are revalued to reflect changes in the property market. Hitherto, those revaluations have been carried out by the Valuation Office Agency (VOA) but now that the VOA has become part of HMRC, this will change for 2029.
The 2026 revaluation has now taken place (1st April 2026). Updated rateable values are now in effect and will be used to calculate business rate bills.
The VOA has calculated the business rate valuation for 2026 based on how much it would cost to rent the property for a year on 1st April 2024.
Facts and figures
There were 2.13 million properties on the 2026 draft list in England and Wales as of 16th November 2025. The total rateable value of these properties was £84.4 billion compared with £70.8 billion on the 2023 rating list.
- Total rateable value on the local lists for England and Wales increased by 19.2%.
- Total rateable value for England increased by 19.4%.
- Total rateable value for Wales increased by 15.2%.
How business rates bills are calculated
Local authorities will calculate the business rates bill by multiplying the rateable value by the relevant multiplier set by the UK and Welsh governments. They will then determine whether to apply any reliefs for which the business is eligible.
Properties exempt from business rates
Some properties are normally exempt from paying business rates, although there are strict legal requirements for when exemptions apply. These types of properties include:
- agricultural land and buildings used for agricultural purposes, including fish farms
- buildings used for the training or welfare of disabled people
- places of religious worship
Remote workers
Those who work remotely do not usually have to pay business rates for home-based businesses if a small part of the house is used for business, or where goods are sold by post.
Retail, hospitality and leisure (RHL) properties
From 1st April 2026, the business rates system in England has changed from two to five distinct multipliers for the 2026/27 financial year, based on property type, use and rateable value (RV).
These changes follow the 2026 revaluation and the conclusion of the temporary Retail, Hospitality and Leisure (RHL) relief scheme, which is being replaced by lower permanent multipliers for qualifying businesses.
2026/27 Business Rate Multipliers
- Small Business RHL Multiplier (RV under £51,000): 38.2p (0.382)
- Small Business Non-RHL Multiplier (RV under £51,000): 43.2p (0.432)
- Standard RHL Multiplier (RV £51,000 to £499,999): 43.0p (0.43)
- Standard Non-RHL Multiplier (RV £51,000 to £499,999): 48.0p (0.48)
- High-Value Multiplier (RV £500,000 and above): 50.8p (0.508)
Paying business rates
Business rates are collected by local authorities. Business rates bills are issues in either February or March that relate to the following tax year.
Businesses can use a special calculator to estimate their business rates bill and if they believe that the figure they have been sent is incorrect, they can contact either
- their local authority (with questions about the bill) or the VOA (if it is believed that the rateable value is incorrect).
They can also appeal the charges to the Valuation Tribunal service.
https://valuationtribunal.gov.uk/
Business rates relief schemes
Depending on individual circumstances, a business ratepayer may be eligible for a rate relief (i.e. a reduction in their business rates bill). There are a range of available reliefs.
When would business rates relief apply?
A business may be eligible for relief if it is:
- a small business
- the only business in a rural area
- a charity or a community amateur sports club
A business owner may also be eligible for business rates relief if, for example:
- they own a property and it’s empty, partly empty or being refurbished
- certain improvements are made to the property
- the rates change by more than a certain amount at revaluation
- they are in financial difficulty
- the property is in an ‘enterprise zone’
- the property is in a ‘freeport’
- the property is a heat network
- it is a pub or live music venue
Local councils can also choose to offer business rates relief to businesses that benefit the local community or economy.
If circumstances change and that affects whether an exemption still applies, the business should contact the local authority as it might now be liable for business rates. Changing circumstances may include:
- the premises change – either the location or the condition
- the nature of the business changes
- part of the property is sublet
- two properties are merged
It should be noted that business rates in Scotland are different from those in England and Wales.
What to do now
Business owners should sign into their business rates valuation account to:
- check the factual details about the property
- see how the property’s valuation was worked out
- advise whether there is a problem with the valuation
