What is business rates relief for retail, leisure and hospitality in England?

In her Autumn Statement, the Chancellor Rachel Reeves announced that for 2025/26, the rate of business rates relief scheme for retail, hospitality and leisure properties would be reduced to 40%, up to a cash cap of £110,000 per business. Businesses in this sector are going to face a potentially sharp rise in business rates. 

This 40% relief rate is temporary until permanent lower multipliers for retail, hospitality and leisure (RHL) properties with a rateable value (RV) under £500,000 are in place from 2026/27. Rateable value is an estimate by the Valuation Office Agency of how much it would cost to rent a property for a year. Business rates are calculated by multiplying the rateable value by the standard, or small business multiplier. The current small business multiplier is frozen for 2025-26. 

The lower multipliers are to be funded by higher multipliers on properties with a rateable value of £500,000 and above, which includes many large distribution warehouses such as those used by online giants. 

The Government’s publication includes the average pub has a rateable value of £16,800. Using the small business multiplier, an estimate of their business rates is £16,800 x 49.9/100 = £8,383.20. With the current 40% relief, this saves the pub £3,353.28 in 2025/26. 

Previously, the 75% relief would have saved the pub £6,287.40. This means, that from April 2025, the average pub will therefore need to find an additional £2,934.12 or £244.51 each month to pay for their business rates. 

What can you do? 

By acting now to look at the impact this could have on your business, you can plan for the extra cost from April 2025 when your payment becomes payable. Where you are impacted by these changes and feel you need further help, you should discuss this with your local council. 

Date published 18 Nov 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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