UK Small Business Rates Relief 2026/27: Complete Guide for Eligible Businesses
Business rates are one of the largest fixed costs for UK small businesses -- but hundreds of thousands of eligible businesses are either missing out on relief entirely or not claiming the full amount they are entitled to. This guide covers small business rates relief thresholds, rural rate relief, retail and hospitality relief, and exactly how to claim in 2026/27.
Business rates (formally non-domestic rates) are a property tax levied on most commercial properties in England -- shops, offices, warehouses, factories, pubs, and many other premises. They are calculated by multiplying the property's rateable value by a multiplier set annually by central government, then applying any applicable reliefs.
Rateable values are set by the Valuation Office Agency (VOA) and are meant to reflect the estimated annual rental value of each property at a fixed valuation date. The most recent revaluation took effect on 1 April 2023, based on rental evidence from 1 April 2021.
Unlike residential council tax, business rates are set centrally and collected by local billing authorities (district or borough councils in England). The revenue is partly retained locally and partly redistributed by central government.
Small Business Rates Relief -- The Core Thresholds
Small Business Rates Relief (SBRR) reduces or eliminates business rates for eligible small businesses in England. The relief applies where the business occupies a single property (or where any additional properties each have a rateable value below £2,900 and the combined total is below £28,000).
Rateable Value
Relief
Multiplier applied
Up to £12,000
100% (nil rates)
Small business (49.9p)
£12,001 -- £14,999
Tapered 0% -- 100%
Small business (49.9p)
£15,000 -- £51,000
No SBRR
Small business (49.9p)
Above £51,000
No SBRR
Standard (54.6p)
Worked Example -- RV £13,500
Relief % = (1 - ((13,500 - 12,000) / 3,000)) x 100 = (1 - 0.5) x 100 = 50%. Gross bill before relief: £13,500 x 49.9p = £6,736.50. Relief (50%): -£3,368.25. Net rates payable: £3,368.25 per year.
Rural Rate Relief
Rural rate relief targets businesses that are essential to the economic life of small rural communities -- places where the closure of the only pub or village shop would be genuinely damaging to the local population. The mandatory element is 50%, with councils able to top this up to 100%.
To qualify, the property must be in a designated rural settlement (population under 3,000) and must be one of the following: the sole general store or post office with an RV up to £8,500; the sole pub or petrol station with an RV up to £12,500; or a property the council decides is of benefit to the rural community (discretionary).
Rural settlements are designated by local councils. If you are in a small village and run the only shop, pub, or filling station, contact your billing authority to confirm whether your settlement qualifies. Many councils extend 100% rural rate relief generously to prevent essential community businesses from closing.
Retail, Hospitality and Leisure Relief
The retail, hospitality and leisure (RHL) relief has been one of the most significant temporary reliefs since 2020. Originally introduced as a 100% rates holiday during COVID-19, it has been stepped down each year but remains available for eligible businesses in England.
For 2025/26 the rate was 40%, with a cash cap of £110,000 per business (not per property). A business with five shops might receive up to £110,000 in total across all five, not £110,000 per shop. The 2026/27 rate will be confirmed at the Autumn Budget; check DLUHC (Department for Levelling Up, Housing and Communities) and your council's website for the current figure.
Eligible properties are those wholly or mainly used for retail, hospitality, or leisure purposes. This includes shops, restaurants, pubs, cafes, cinemas, live music venues, hotels, gyms, and sports facilities. Financial services, medical services, and offices do not qualify. The relief is applied by the local billing authority -- you do not need to apply separately in most cases.
Other Reliefs and Support
Beyond SBRR and RHL relief, a range of other reliefs may apply depending on your circumstances:
Charitable relief: Charities and community amateur sports clubs are entitled to 80% mandatory relief. Billing authorities can top this up to 100%.
Discretionary relief: Councils can award discretionary relief to any business for any reason they consider appropriate, including businesses facing exceptional hardship. This is not guaranteed.
Transitional relief: Limits sudden large increases (or decreases) following a revaluation. The current transitional relief scheme runs from April 2023 and phases in changes gradually.
Supporting Small Business relief: For businesses that lost SBRR due to the 2023 revaluation, this relief caps annual rate increases to £600 per year.
Key Facts at a Glance (2026/27 -- England)
100% relief threshold
RV up to £12,000
Tapered relief range
RV £12,001 -- £14,999
Small business multiplier
49.9p per pound of RV
Standard multiplier
54.6p per pound of RV
Rural relief (mandatory)
50% (councils can top up to 100%)
RHL relief (2025/26)
40%, cap £110,000 per business
Who sets rateable values
Valuation Office Agency (VOA)
Last revaluation
1 April 2023 (AVD 1 April 2021)
Frequently Asked Questions
Frequently Asked Questions
What is the rateable value threshold for 100% small business rates relief?
In England, properties with a rateable value (RV) of £12,000 or less qualify for 100% small business rates relief, meaning no rates are payable. Properties with an RV between £12,001 and £15,000 receive tapered relief that reduces gradually from 100% to 0%. Properties with an RV above £15,000 do not qualify for SBRR, though they may qualify for other reliefs. Note: thresholds differ in Wales, Scotland, and Northern Ireland.
How is tapered small business rates relief calculated?
For properties with a rateable value between £12,001 and £14,999, the relief percentage is calculated by the formula: relief % = (1 - ((RV - 12,000) / 3,000)) x 100. So a property with an RV of £13,500 receives 50% relief. Your local council applies this calculation automatically. From £15,000 upwards no SBRR applies, though the small business multiplier (49.9p in 2026/27) continues to apply to properties with an RV up to £51,000.
Can I claim small business rates relief if I occupy more than one property?
Generally no. Small business rates relief is designed for businesses occupying a single property. If you occupy a second property, you will normally lose SBRR on your main property. There is an exception: if the additional properties each have a rateable value of less than £2,900, and the combined RV of all properties is below £28,000 (or £20,000 in London), you may retain SBRR on your main property for up to 12 months after acquiring the additional property.
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What is the small business multiplier and how does it affect my bill?
Business rates are calculated by multiplying the rateable value by the "multiplier" (also called the poundage). There are two multipliers in England: the standard multiplier (54.6p for 2026/27, used for properties with RV above £51,000) and the small business multiplier (49.9p for 2026/27, used for properties with RV up to £51,000). If your property has an RV of £20,000 and no relief applies, your gross rates bill is £20,000 x 49.9p = £9,980 before any transitional relief.
What is rural rate relief and who qualifies?
Rural rate relief applies to certain sole occupiers of properties in designated rural settlement areas (settlements with a population below 3,000). Qualifying property types include the sole village shop or post office (RV up to £8,500), the sole pub or petrol station (RV up to £12,500), and any other business that the local council considers beneficial to the local community. The mandatory relief is 50%, but councils can top this up to 100% using their discretionary rural rate relief powers. Many councils do award the full 100%.
What is the retail, hospitality and leisure relief and how much is it?
The retail, hospitality and leisure (RHL) relief is a temporary measure the government has renewed annually since COVID-19 to support businesses in high streets and tourist economies. For 2025/26 the relief was set at 40% (down from 75% in prior years), with a cash cap of £110,000 per business across all eligible properties. The 2026/27 rate should be confirmed by your local council -- check the latest DLUHC guidance as the rate can change each Budget. The relief applies to occupied retail, hospitality, and leisure properties in England only.
How do I apply for small business rates relief?
Contact your local billing authority (district or borough council) to apply. Most councils allow you to apply online or by post. You will need to provide your property address, rateable value (which you can check on the Valuation Office Agency website), and confirm that you only occupy one property or that any additional properties meet the criteria. Relief is not applied automatically in all cases -- if you believe you qualify and have not received it, contact your council promptly as relief can be backdated only in limited circumstances.
Can I challenge my rateable value to reduce my business rates bill?
Yes. The Check, Challenge, Appeal (CCA) process allows you to check your rateable value, provide evidence, and formally challenge it if you believe it is wrong. Rateable values are set by the Valuation Office Agency (VOA) and are based on the estimated open market annual rental value of the property at a set Antecedent Valuation Date. The most recent revaluation came into effect in April 2023, using 1 April 2021 as the valuation date. If market rents have moved significantly since then, or if the VOA has made an error, a challenge may reduce your RV and therefore your rates bill.
Is there any relief available if my property is empty?
Empty properties are generally exempt from business rates for the first 3 months (6 months for industrial properties). After that, full rates apply to empty properties. There is no SBRR on empty properties -- the relief requires the property to be occupied by a qualifying business. Some councils have discretionary powers to award relief on empty properties in limited circumstances, but this is not guaranteed.
Do business rates rules differ in Scotland, Wales and Northern Ireland?
Yes, significantly. Scotland has its own non-domestic rates system with different thresholds -- the Small Business Bonus Scheme provides 100% relief for properties with an RV up to £12,000 and tapered relief to £20,000. Wales offers 100% mandatory rural rate relief and different transitional relief rules. Northern Ireland has a separate rating system administered by Land and Property Services with its own small business rate relief scheme. The figures in this guide relate to England unless otherwise stated.
