Key Changes to Business Rates in Rachel Reeves’ Autumn Budget
Following announcements in yesterday’s budget, our Senior Rating Advisor, Clive Schless, provides a brief commentary on the changes in how Business Rates liabilities are calculated and how the changes might affect the rating landscape.
For many, Rachel Reeves’ second budget will have provided the usual, rather mundane, spectacle of the Chancellor of the Exchequer attempting to balance the books – the hole in public finances, fiscal drag, borrowing costs, income tax rates and all the rest. But for the business rates community, the 2025 budget has represented the alignment of several new measures which will finally unlock the answer to the question, “What will my April 2026 liability be?”.
- In 2024 it was revealed that, in an equitable attempt to move away from discretionary reliefs for some struggling sectors, for the April 2026 Revaluation, THREE new multiplier values will be introduced to the standard and small business multipliers that are already in operation. These include a high-rate multiplier to be applied to RVs over £500,000 which will generate the funding for two discounted multipliers for Retail Hospitality and Leisure properties.
- In April 2025 it was announced that, to improve efficiency and transparency, the Valuation Office Agency will lose its role as an autonomous government arm and will be incorporated into HMRC.
- After some speculation it was further announced that Budget Day will also be the day that the Draft 2026 Rating List for England and Wales will be published and the (five) multiplier values will be revealed.
- It was also widely reported that Retail Hospitality & Leisure properties will benefit from a between 10p and 20p in the pound reduction against the standard multipliers.
Sadly, in respect of the final point, this has not been the case.
As seen in the table below the true scale is that, from April 2026 RHL occupier will benefit from only a 10% discount against the, albeit reduced standard rate multipliers.
Multipliers matrix
Whilst it appears that struggling Retail Hospitality & Leisure occupiers are benefiting from a fair multiplier that they can call their own, the reality is that the new RHL multipliers serve to illustrate that the reliefs that smaller occupiers have benefited from across the current list has diminished substantially, resulting in a liability increase next year of around 300% over what they were paying last year.
- in 2024/25 a retail occupier of a property with an RV of £35,000 would pay a liability of £4,360; next year a £35,000 RHL RV will generate a liability of £13,370.
- a retail occupier of a property with an RV of £75,000 would pay an extra £22,000 over their 2024/25 liability of £10,200.
The other main headline from the budget for retail occupiers is the removal of the £110,000 relief liability cap. Whilst this is an advantageous move for larger pub and out of town retail occupiers, who will benefit greatly from this, hundreds of thousands of smaller local high street occupiers will remain disadvantaged.
Finally, it was announced that smaller business looking to expand to a second location will benefit from three years Small Business Rates Relief rather than one. Whilst this appears to be a progressive move, because of the overall increase in liability before the small business threshold is reached, the incentive for the small business operator to expand is diminished.
So, what will my Business Rates liability be in 2026?
It will remain to be seen whether new multipliers and a restructured VOA result in a fairer more efficient business tax but, given that the multipliers are directly linked to the state of the economy, despite a frustrating wait and indifferent projected results, this Budget Day announcement does make sense because the removal of discretionary relief provides certainty to businesses planning their fiscal futures. However, the application of 5 multipliers – or more if we account for London additions – makes it a more difficult landscape to negotiate.
Now that the influencing factors have finally aligned, your 2026 business rates calculation and liability will radically change but QuoinStone will be in a prime position to provide Business Rates clients with a full analysis of the impact in the changes to their liabilities moving into the 2026/27 financial year.
QuoinStone will be publishing a 2026 liability calculator on our website shortly, or if you would prefer, we can forwarded the calculator directly to you – just drop us a line.
For more information on these matters and to discuss the Business Rates landscape more generally, please contact our Head of Rating Katy Ellis or Clive Schless who will both be pleased to discuss how we can map your rating future.
Call: +44 (0)20 3393 3314
