2026 Budget - What this means for Business Rates?

Yesterday in John Healey’s budget, there was a lot to digest from a business rates perspective, and we’ve outlined the key points below :-

Relief for pubs, social clubs and live music venues

The Government is increasing the relief for pubs, social clubs and many live music venues from 15% to 35% from 1st April 2027. The highest valued live music venues with Rateable Values of £1 million and above will not receive the increased rate but will continue to benefit from the 15% relief which has previously been applied in 2026-27. 

Threshold for 100% Small Business Rates Relief for Retail, Hospitality & Leisure properties

Perhaps the most significant change is that qualifying Retail, Hospitality & Leisure (RHL) properties in England will have their Small Business Rates relief threshold increased. Whilst for most businesses (i.e. those occupying offices, industrials) a Rateable Value needs to be £12,000 or below to receive £0 business rates liability, this threshold will be increased to £18,000 for RHL properties from 1st April 2027. The relief will be tapered up to £21,000, i.e. at £19,500, 50% relief will be available.

The measure will be funded by increasing taxes on Gambling and we’ve also noted that Adult Gaming Centres and Vape Shops will have their access to Small Business Rates Relief removed. So, a clear signal from the Government which sector they intend to help. 

Business rates frozen in ‘real terms’ for Retail, Hospitality & Leisure properties

The Government have confirmed that for qualifying RHL properties business rates bill increases are capped by CPI inflation in 2027/28 and 2028/29. The principal benefit will be for properties benefitting from Transitional relief or Supporting Small Business rates relief and is another measure aimed to support the retail sector. 

Valuation Tribunal Fees to be abolished

We didn’t see any pre-Budget rumours on this topic but welcome news that fees for progressing business rates cases to the Valuation Tribunal for England will be abolished from the 2026 Rating List onwards. These currently range from £150 to £300. 

New anti-avoidance provisions

The Government are to introduce a General Anti-Avoidance Rule for business rates in England following a consultation and will reimburse local authorities for their legal costs in fighting unsuccessful cases. We have previously discussed Empty Rates relief on this blog, and this is another step in the direction of the Government clamping down on mitigation schemes. 

Conclusion

Overall, the Budget is very good news for small retail businesses on the High Street, however by focusing on these businesses, there will be many other small businesses who are struggling with their running costs who will feel they have been excluded. 



It is also clear that a Rateable Value won’t necessarily translate to what is shown on your business rates bill, as there are now even more reliefs and factors at play.

If you would like to discuss anything in this article in more detail, then please don’t hesitate to get in touch.