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.

This process began with announcements at Autumn Budget 2024, and over the next two years, a series of engagements and reforms will take place to start a transformation to the system, alongside the routine revaluation of properties in 2026.

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
	Large 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 this policy with the introduction of the Non-Domestic Rating (Multipliers and Private Schools) Bill, introduced into the House of Commons on 13 November 2024. The Bill contains limits to how much the rates for new multipliers can differ from the rates of existing multipliers. 

• The rate for the large multiplier cannot be more than 10p higher than the standard multiplier rate.
• The rates for the standard RHL multiplier and small RHL business 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 in 2026 whilst also acting as guardrails, particularly to reassure stakeholders there are legislative limits to the rate of the large multiplier.

Eligibility for the new RHL multipliers will be set through secondary legislation, and the government intends that the scope will broadly reflect the existing RHL relief. Further information regarding the Bill 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, as usual, there will be a Budget representations process ahead of Budget 2025, and stakeholders are welcome to input into this process once it is launched. The government is also open to receiving evidence from stakeholders on the practical impact of the new multiplier structure.    

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. This maintains fairness in the system by redistributing business rates liabilities amongst ratepayers.

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

The government is legally required to provide Transitional Relief to support properties facing the biggest increases in bills. As is usual practice, the government will announce details on Transitional Relief schemes at Autumn Budget 2025, in light of the revaluation outcomes. 

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

The Budget announcements are the government’s first steps to support the high street. However, the government wants to go further to modernise the system, and published a Discussion Paper, ‘Transforming Business Rates’, at the Budget, setting out priority areas for reform. This paper invites 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.

The government has recently completed an initial stage of  engagement to understand stakeholder views and areas of interest to reform. While the window for expressing interest in this process has now passed, the government is open to receiving written representations in response to the priority areas for further reform set out in the Discussion Paper until 31 March 2025.

Stakeholder representations will be considered when developing options for reform, and further stakeholder engagement will be targeted to develop specific reform options ahead of the 2025 Budget. Final decisions will be taken in the context of the government’s objectives for the business rates system and its wider objectives, including the overall fiscal position to ensure the sustainability of the public finances.

Transforming the business rates system is a multi-year process, and reforms taken forward will be phased over the course of the Parliament to provide certainty for businesses and local government finance.

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: Announcement of 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