Business Rates Reform April 2026: How the Revaluation Affects Commercial Property

Business rates are a significant overhead for commercial property occupiers in England and Wales. From 1 April 2026, a major revaluation takes effect, reflecting updated rental values and introducing a restructured multiplier system that will create winners and losers across the market. Understanding the new regime, and the transitional reliefs available, is
essential for any business with a commercial property liability.

What Is the 2026 Business Rates Revaluation?

The Valuation Office Agency (VOA) has updated the rateable values of all commercial properties in England and Wales. The new rateable values, which form the basis of business rates bills, are effective from 1 April 2026 and are based on rental values as of 1 April 2024.

Business rates revaluations are intended to ensure that the tax more accurately reflects current market conditions. Properties in areas where rents have risen, notably logistics and industrial, are likely to see higher rateable values. Those in markets under rental pressure, such as secondary retail and some office locations, may see more modest changes or reductions.

The New Multiplier Structure

The 2026 revaluation introduces a new tiered multiplier structure. For the 2026/27 rating
year, three multipliers apply:

• Small Business Multiplier (rateable value under £51,000): 43.2p in the pound, applies to smaller commercial properties, providing a reduced effective rate
• Standard Multiplier (rateable value £51,000–£499,999): 48.0p in the pound, applies to the majority of mid-range commercial properties
• High-Value Multiplier (rateable value £500,000 and above): 50.8p in the pound, a higher rate applies to the largest properties, with additional revenue used to fund reliefs at the lower end

From 2027, a new five-tier multiplier structure is planned, introducing further granularity across the rateable value spectrum.

Retail, Hospitality and Leisure Relief

The Government has expanded the Retail, Hospitality and Leisure (RHL) relief scheme, which provides a discount on business rates for qualifying properties including shops, restaurants, cafes, bars, hotels, gyms, and entertainment venues. RHL relief is applied at billing authority level and typically requires a formal application.

Businesses in qualifying sectors should not assume the relief will be applied automatically, contact your local authority to confirm eligibility and apply as early as possible.

Transitional Relief: Protecting Ratepayers From Sharp Increases

For the largest commercial property occupiers, sharply higher rateable values could translate into substantially increased bills. The Government has committed £3.2 billion to a Transitional Relief scheme for high-value ratepayers, designed to phase in increases over a defined period rather than applying them in full from day one.

A separate £500 million Supporting Small Business scheme will assist smaller businesses that face material rate increases despite the lower small business multiplier.

Challenging Your Rateable Value

If you believe your rateable value has been incorrectly assessed, you can challenge it through the Check, Challenge, Appeal (CCA) process:

• Check: Verify or correct the factual information held by the VOA about your property
• Challenge: Submit a formal proposal for a different rateable value if the Check stage does not resolve the issue
• Appeal: If the Challenge is unsuccessful, appeal to the Valuation Tribunal for England

Specialist rating advice is recommended before committing to a formal challenge, as the
process can be time-consuming and costly if unsuccessful.

What Should Commercial Property Occupiers Do Now?

1. Check your new rateable value using the VOA’s Find a Business Rates Valuation service
2. Review your rates bill carefully to confirm the correct multiplier has been applied and all eligible reliefs have been included
3. Apply for RHL relief if your property qualifies, do not assume it will be applied automatically
4. Consider a CCA challenge if your rateable value appears to be significantly above market rental levels as of April 2024
5. Model the financial impact across your property portfolio and ensure 2026/27 budgets reflect revised rates liabilities
6. Monitor multiplier reform, the five-tier structure planned from 2027 will require further modelling as details are confirmed

The 2026 business rates revaluation is a significant reset of the commercial property tax landscape. For occupiers, the priority now is to understand their new liability, claim every available relief, and challenge any rateable value that does not reflect market reality.