Business rates from April 2027: Budget 2026 reliefs explained

Budget 2026 targets business rates support at high street businesses in England. From April 2027, more retail, hospitality and leisure properties will pay nothing, the rest will see bills frozen in real terms for two years, and pubs get a bigger discount. Business rates are devolved, so these measures apply in England only; the Scottish, Welsh and Northern Ireland governments receive funding they can use for similar support if they choose.

The package for retail, hospitality and leisure

The Treasury says that from April 2027 every retail, hospitality and leisure (RHL) property in England will see its business rates “either frozen in real terms, reduced, or cut to zero”. The measures are:

• Higher small business rates relief thresholds for RHL properties. From 1 April 2027, 100% relief applies up to a rateable value of £18,000, up from £12,000, with tapered relief up to £21,000, up from £15,000. The government says around 70,000 more high street businesses will pay no business rates, including 3,500 pubs, 3,900 restaurants, 2,200 cafés and 1,700 hairdressers and beauty salons.
• A two-year real-terms freeze. Business rates bill increases for qualifying RHL properties are capped at CPI inflation in 2027-28 and 2028-29. The cap does not cover increases from improvements to the property, or the loss of other reliefs such as improvement relief or hardship relief after 1 April 2026. MHCLG says there is no rateable value limit on the freeze, but properties vacant on 1 April cannot qualify for that year.
• Bigger relief for pubs and music venues. Relief for pubs, social clubs and all but the largest live music venues rises from 15% to 35% from 1 April 2027. Venues with a rateable value of £1 million or more keep the 15% relief and the real-terms freeze. The Treasury says this is worth over £3,000 on average per pub next year.
• Supporting Small Business extended. The 2026 Supporting Small Business scheme is extended for one year from 1 April 2027 to ratepayers who were receiving 2023 Supporting Small Business relief, around 37,000 small and independent ratepayers.

The government says half of all RHL properties in England will pay no business rates, and around 110,000 will see their bills fall next year.

The 2027-28 multipliers

How it is paid for

The Chancellor said the support is funded by raising Machine Games Duty on higher-stake gaming machines from 20% to 25% from April 2027, by extending VAT collection on online marketplaces to UK sellers, and by extending the 1p Transitional Relief Supplement for two more years. The supplement is paid by properties whose bills are rising by less than the transitional relief and Supporting Small Business caps, or falling.

Other business rates changes

• Vape shops and adult gaming centres. From April 2027 adult gaming centres lose access to the RHL multipliers, and vape shops lose both the RHL multipliers and small business rates relief.
• Anti-avoidance. A General Anti-Avoidance Rule for business rates will be introduced as soon as possible after consultation this winter, and from 1 April 2027 the government will reimburse councils’ reasonable external legal costs in unsuccessful cases that test a point of law.
• Appeal fees abolished. The £150 and £300 Valuation Tribunal fees for non-domestic rating appeals in England will be abolished for the 2026 list and future lists, and fees already paid on 2026 list appeals will be refunded.
• Local retention. The government intends local government to keep 100% of business rates before the end of the decade, with mayors receiving a share from 2027.

What it means for accountants and their clients

Check every high street client’s rateable value. Shops, cafés, salons, pubs and other leisure businesses with rateable values up to £21,000 should check whether the new thresholds bring them into full or partial relief from April 2027. Small business rates relief normally depends on the ratepayer’s other properties as well, so look at the whole portfolio.

Use the freeze in budgets. For qualifying RHL clients, bill increases in 2027-28 and 2028-29 are limited to CPI, which makes cost forecasts more predictable. Remember that improvements to the property can still raise the bill.

Consider appeals. With Valuation Tribunal fees abolished, clients who held back from appealing their 2026 valuation on cost grounds may want to revisit it.

Flag the vape shop and gaming changes early. Affected clients face higher bills from April 2027.

For VAT measures that help fund the package, see online marketplaces collecting VAT. For the wider small business picture, see Budget 2026 for sole traders and the self-employed.

Frequently asked questions

What is the new small business rates relief threshold for shops and pubs?

From 1 April 2027, qualifying retail, hospitality and leisure properties in England get 100% relief up to a rateable value of £18,000, with tapered relief up to £21,000.

What is the business rates freeze?

For qualifying retail, hospitality and leisure properties in England, increases in business rates bills in 2027-28 and 2028-29 are capped at CPI inflation, so bills do not rise in real terms.

Do the business rates changes apply in Scotland, Wales and Northern Ireland?

No. Business rates are devolved. The Scottish, Welsh and Northern Ireland governments receive extra funding they can use for equivalent measures if they choose.

What are the business rates multipliers for 2027-28?

In England: 49.7p standard, 44.7p small business, 44.7p standard retail, hospitality and leisure, 39.7p small business retail, hospitality and leisure, and 52.5p high value.