Business Rates

Business rates (also known as non-domestic rates) are a tax on the occupation of non-domestic property in England and Wales. They are administered by local councils and based on the rateable value of the property, which is an estimate of its annual open-market rent at a fixed valuation date. Business rates are a significant cost for many businesses, but a range of reliefs and exemptions can reduce the bill significantly, particularly for small businesses, retail premises, and properties in disadvantaged areas. This guide covers how rates are calculated, the available reliefs, and how to appeal your rateable value.

How Business Rates Are Calculated

Your business rates bill is calculated by multiplying your property's rateable value (RV) by the appropriate multiplier set by the government. The standard non-domestic multiplier for 2025/26 is 51.2p per £1 of rateable value, and the small business multiplier is 49.3p. The small business multiplier applies to properties with a rateable value below £51,000. After applying the multiplier, any eligible reliefs are subtracted to arrive at the final bill. Rateable values are reassessed at regular revaluations; the most recent revaluation took effect from 1 April 2023, based on rental values as at 1 April 2021. The next revaluation is expected in 2026.

Small Business Rates Relief

If you occupy a property with a rateable value of £15,000 or less, you may qualify for 100% small business rates relief, meaning you pay no business rates at all. The relief tapers from 100% at £15,000 RV to 0% at £51,000 RV. To qualify, your property must be your only business premises, or the combined rateable value of all your properties must not exceed £15,000. If you have additional properties, each with a rateable value under £2,899, they are ignored for the purposes of the limit. Small business rates relief is claimed from your local council and must be renewed periodically. The relief is available in England and Wales, although the thresholds differ slightly in Wales.

Retail, Hospitality, and Leisure Relief

Businesses in the retail, hospitality, and leisure sectors can claim significant relief on their business rates. The government has offered temporary relief at varying rates in recent years — for 2025/26, eligible properties receive a 75% relief, up to a cap of £110,000 per business. Eligible properties include shops, restaurants, cafes, pubs, cinemas, gyms, hotels, and holiday lets. The relief is automatically applied by local councils to qualifying properties. Claimants must ensure their property is used primarily for eligible purposes. This relief is subject to change in each year's Budget and may be extended or reduced.

Other Reliefs and Exemptions

A variety of other reliefs are available. Charity relief provides 80% relief for properties occupied by registered charities and used for charitable purposes. Rural rate relief provides 50% to 100% relief for the sole general store, post office, or pub in a rural settlement. Enterprise Zone relief can be claimed by businesses in designated enterprise zones. Void relief applies to empty industrial buildings for six months (three months for other property types), after which full rates become payable. Transitional relief limits the annual increase or decrease in rates following a revaluation. Reliefs must usually be claimed from the billing authority (your local council) — they are not automatic in all cases.

Appeals and Challenges

If you believe your rateable value is incorrect, you can appeal to the Valuation Office Agency (VOA) through the "Check, Challenge, Appeal" process. The first stage is to check your property details on the valuation list — ensure the floor area, description, and rent figures are correct. If you disagree with the VOA's valuation, you can challenge it by providing evidence (comparable properties, rent schedules, rental valuation reports). If the challenge is rejected, you can appeal to the Valuation Tribunal for England (VTE). There is no fee for the initial check, but legal costs can mount if you engage a rating surveyor. You should appeal promptly — changes to the rating list are usually backdated to the date of the proposal.

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