Policy paper

Business rates: forward look

Updated 11 September 2025

Over the course of this Parliament, the government is creating a fairer business rates system that protects the high street, supports investment, and is fit for the 21st century.

Permanent support for the high-street from 2026

At Autumn Budget 2024, the government announced its intention to introduce two lower multipliers for Retail, Hospitality and Leisure (RHL) properties with rateable values (RVs) below £500,000. These will commence from April 2026 and will give long-term certainty and support to the high street, in contrast to the previous RHL relief, which created a yearly cliff-edge.

The government has set out its intention for these two new lower rates to be funded sustainably. To this end, the government also intends to introduce a higher multiplier for all properties with RVs of £500,000 and above. This group represents less than one per cent of all properties, but captures the majority of large distribution warehouses, including those used by online giants.

Multiplier structure from 2026-27

Current system (2025-26)	New system (2026-27 onward)
Small business multiplier, all properties, RV below £51,000	Small business RHL multiplier, RHL properties only, RV below £51,000	Small business multiplier, non-RHL properties, RV below £51,000
Standard multiplier, all properties, RV £51,000 and above	Standard RHL multiplier, RHL properties only, RV £51,000 - £499,999	Standard multiplier, non-RHL properties, RV £51,000 - £499,999
	High-value multiplier, all properties, RV £500,000 and above

The rates for the new multipliers will be announced at Budget 2025, taking account of the revaluation due in 2026, as well as the economic and fiscal context.

Non-Domestic Rating Bill

The government began legislating for the new multipliers through the Non-Domestic Rating (Multipliers and Private Schools) Act 2025, which received Royal Assent on 3 April. The Act contains limits to how much the rates for new multipliers can differ from the rates of existing multipliers:

• The rate for the high-value multiplier cannot be more than 10p higher than the standard multiplier rate.
• The rates for the standard RHL multiplier and small business RHL multiplier cannot be lower than 20p less than the small business multiplier.
• These maximum and minimum rates should not be taken as the intended rates for these multipliers. Rather, these provide flexibility to adapt to outcomes of the 2026 revaluation whilst also acting as guardrails, particularly to reassure stakeholders there are legislative limits to the rate of the high-value multiplier.

Eligibility for the new RHL multipliers will be set through secondary legislation, and the government intends for the scope to broadly reflect the existing RHL relief. Further information regarding the Act can be found at: https://bills.parliament.uk/bills/3887.

The government recognises that businesses are interested in the rates for the new multipliers in 2026-27. The government does not usually consult on tax rates. However, stakeholders are welcome to input into the Budget representation process ahead of Budget 2025.    

2026 Revaluation

The reforms set out above will take place alongside a routine business rates revaluation. Every three years, the Valuation Office Agency (VOA) updates the RVs of non-domestic properties to reflect changes in the property market. Revaluations maintains fairness in the system by redistributing business rates liabilities amongst ratepayers. They are not carried out to generate extra revenue.

The next revaluation is due to come into effect on 1 April 2026 based on RVs from 1 April 2024. At Budget 2025, the government will announce the multiplier rates for 2026-27, which will reflect revaluation outcomes.

The government will support ratepayers seeing large bill increases as a result of the revaluation. Only once we understand the complete 2026 revaluation picture will the government be in a position to make final decisions on support, at Budget 2025.

The VOA runs the revaluation process and manages communication with stakeholders about the revaluation outcomes. Following completion of the revaluation, the VOA will publish a full list of updated RVs for all non-domestic properties.

Transforming Business Rates

Through its announcements at Autumn Budget 2024, the government is delivering on its promise to support the high street with permanent cuts to business rates for RHL businesses with rateable values below £500,000.

The government wants to go further to modernise the system, and published a Discussion Paper, ‘Transforming Business Rates’, setting out priority areas for further reform. This paper invited industry to help co-design a fairer business rates system that supports investment and is fit for the 21st century. Further information regarding the Discussion Paper can be found at: Transforming business rates - GOV.UK.

Since the publication of the Discussion Paper, the Treasury has completed the first phase of engagement, which consisted of roundtables with over 250 attendees who represented 230 organisations, and written submissions from over 140 stakeholders.

On 11 September, the Government published an Interim Report summarising stakeholders’ views and outlining priority reforms that the Government will consider over the course of this Parliament to improve the operation of the business rates system. There will be a further update at Autumn Budget 2025. Further information regarding the Interim Report can be found at: Transforming Business Rates: Interim Report

We will be carrying out further targeted engagement to develop the priority reforms outlined in the Interim Report. Final decisions will be taken in the context of the government’s objectives for the business rates system and its wider objectives, including to maintain the public finances on a sustainable footing.

Transforming the business rates system is a multi-year process, with a need for ongoing reform. The government will consider reforms beyond Autumn Budget 2025, and any reforms taken forward will be phased over the course of the Parliament.

Timeline

The table below sets out key milestones for business rates reforms and the revaluation. This may be subject to change where there are further policy developments in the business rates reform agenda.

Date	New multipliers to protect the high-street	Transforming Business Rates	Revaluation
Autumn Budget 2024	Announcement of 2025-26 support & new multipliers	Publication of Discussion Paper	Valuation and analysis
Q4 2024 – Q1 2025	Policymaking and legislative process	Initial stakeholder engagement across all sectors and policymaking	Valuation and analysis
Q2 – Q3 2025	Policymaking and legislative process	Further stakeholder engagement on specific reform options	Valuation and analysis
Q3 – Q4 2025	Budget 2025: Announcement of all multiplier rates for 2026-27 and details of Transitional Relief scheme.	Budget 2025: Update on reforms	Publication of the draft 2026 list
Q1 2026 onward	New multipliers come into effect from April 2026	Consideration of further reforms, phased over parliament	Publication of final 2026 list on 1 April 2026