Business rates explained, and the reliefs you can claim

Business rates are charged on most non-domestic properties, such as shops, offices, pubs, warehouses, factories, holiday rental homes and guest houses. You will probably have to pay them if you use a building, or part of one, for non-domestic purposes.

Your local council sends the bill in February or March each year, for the following tax year. This guide covers England. Scotland and Northern Ireland handle business rates differently, and Wales has its own rules and multipliers, so check GOV.UK or nibusinessinfo.co.uk if your premises are outside England.

Some properties are exempt, for example agricultural land and buildings and buildings registered for public religious worship.

Your bill is the property’s rateable value multiplied by a multiplier set for the tax year, and then reduced by any relief you are entitled to. The rateable value is the property’s open market rental value on 1 April 2024, as estimated by the Valuation Office (VO).

If your rateable value is £500,000 or more, the multiplier is 50.8p. Your council may use the lower retail, hospitality and leisure multipliers for a shop, restaurant, café, bar, pub, cinema, music venue, gym, spa or hotel. GOV.UK says these replace the retail, hospitality and leisure relief offered for 2025 to 2026, and that you can ask your council whether your property is eligible.

A revaluation is when the VO updates the rateable value of every business property to reflect changes in the property market. The most recent one took effect in England and Wales on 1 April 2026 and is based on open market rental values from 1 April 2024.

At a revaluation, all properties get a new rateable value and the multipliers are revised, so a change in your rateable value does not always mean a change in your bill. The VO may ask you for rent and lease details so it can value your property accurately.

A higher bill after the revaluation can be softened by transitional relief and, for some businesses, supporting small business relief. Both are covered below.

Several reliefs can reduce a bill in England, and your local council decides eligibility, sends the bills and collects the payments. Some reliefs are applied automatically and some you need to ask for, so contact your council to find out what applies to you.

There are further reliefs for enterprise zones, freeports and heat networks, and councils can choose to offer relief to businesses that benefit the local community or economy. The full list is on GOV.UK’s business rates relief guide, listed in the sources.

You can get small business rate relief if your property’s rateable value is under £15,000 and your business only uses one property, although you may still get relief if you use more. You will not pay business rates on a property with a rateable value of £12,000 or less if it is the only one your business uses.

For rateable values of £12,001 to £15,000, the relief falls gradually from 100% to 0%. GOV.UK’s examples are that a rateable value of £13,500 gets 50% off and £14,000 gets 33% off. You cannot get small business rate relief and charitable rate relief at the same time.

If you take a second property, you keep relief on your main property for 12 months if you got the second property before 27 November 2025, or 36 months if you got it on or after that date. After that you can still keep it if none of your other properties has a rateable value above £2,899 and the total rateable value of all your properties is under £20,000 (£28,000 in London).

Transitional relief limits how much your bill can rise each year because of the revaluation, and your council adjusts the bill automatically if you are eligible. The cap depends on your rateable value.

Supporting small business relief is separate. It applies if your bill has increased because of the revaluation and you lost some or all of your small business rate relief, rural rate relief, retail, hospitality and leisure relief or 2023 supporting small business relief. For 2026 to 2027 your bill goes up by no more than £800 or the percentage cap in the same ranges (5%, 15% or 30%), whichever is greater.

Yes. If you think your rateable value is wrong, you can challenge it with the Valuation Office through your business rates valuation account. You can also report changes to your property, such as floor area or parking, at any time.

Check the details the VO holds first: floor areas, how the space is used and the rent and lease information it asked for. A wrong detail can change the value your bill is built on.

Home-based businesses should check too. You do not usually pay business rates if you use a small part of your home as an office or sell goods by post. You may pay business rates as well as Council Tax if the property is part business and part domestic, you serve visiting customers, you employ people there or you have converted part of the home. Ask the VO if you are unsure.

Contact your council early. GOV.UK lists hardship relief for businesses in financial difficulty, and your council is the body that decides whether you qualify and how to arrange payment.

If a bill is a one-off pressure on cash flow, plan for it as you would a tax payment. Our cash flow forecast guide shows how to pencil a yearly bill into your month-by-month picture, and our guide to what working capital is explains the gap that a large bill can open.

Borrowing to pay a bill adds interest and fees, so treat it as a choice to weigh and not the first step. Our small business grants guide covers other support to look at first.

Capzy is a credit broker, not a lender, and is paid by the lender. We do not assess, reduce or collect business rates and do not give tax or property advice, so your council, the VO or an accountant is the right contact.

If premises costs are squeezing your cash flow, you can check your funding options with a soft search that does not affect your credit score. A full application to a lender may involve a hard search, and any offer is subject to status and lender criteria. For businesses that run on premises, see our pages on retail finance and hospitality finance.