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Business rates remain a high fixed cost for bricks-and-mortar retailers, and the system changed substantially from April 2026.
In England, the temporary Retail, Hospitality and Leisure (RHL) relief that operated in 2025/26 was replaced by permanently lower business rates multipliers for qualifying retail, hospitality and leisure premises with a rateable value below £500,000. At the same time, the 2026 revaluation reset property values, meaning a lower multiplier does not necessarily translate into a lower bill for every retailer.
This guide focuses primarily on business rates relief for retailers in England. Business rates are devolved, with separate arrangements in Scotland, Wales and Northern Ireland, so retailers outside England should check the rules that apply in their nation.
Table of Contents
Key Takeaways
- The old RHL discount is gone. From April 2026, the 40% relief scheme ended and qualifying retail properties below £500,000 rateable value now benefit from two lower multipliers instead, saving up to 5p per pound – though a higher rateable value after the revaluation can still mean a bigger bill overall.
- Always check the full picture, not just one number. Your final rates bill depends on rateable value, which multiplier your council applies, and any reliefs such as Small Business Rate Relief, Supporting Small Business Relief, or Transitional Relief – looking at any one figure in isolation can be misleading.
- Relief reduces the cost; finance bridges the gap. If a cash flow problem remains after claiming every relief available and spreading payments across 12 months, short-term funding can help, but borrowing should be the last step, not a substitute for entitlements the business already qualifies for.
What are business rates and how are they calculated?
Business rates are a tax on most non-domestic properties. The starting point for an English retailer’s bill is relatively straightforward:
Rateable value × applicable business rates multiplier = gross business rates liability
The rateable value is set by the Valuation Office Agency (VOA) and broadly represents the annual rent for which the property could have been let on the open market at a specified valuation date. For the rating list that took effect on 1 April 2026, that valuation date was 1 April 2024.
The local authority then applies the appropriate multiplier. For example, a qualifying retail property with a 2026 rateable value of £80,000 falls within the standard RHL band. Applying the 43.0p multiplier gives a starting liability of £34,400 before any applicable transitional relief, Supporting Small Business Relief or other adjustments.
That distinction between rateable value and multiplier is particularly important after a revaluation. A shop may receive the new lower RHL multiplier but still see its final liability increase if its rateable value has risen sufficiently. GOV.UK specifically notes that a change in rateable value does not necessarily produce an equivalent change in the amount actually payable because multipliers and relief arrangements also affect the final bill.
Business rates relief available to UK retailers in 2026
The biggest change for retailers in England is that the former annual RHL discount has ended.
From April 2026, qualifying properties instead benefit from two lower RHL multipliers. The policy applies to occupied properties with a rateable value below £500,000 that meet the statutory definition of retail, hospitality or leisure use. To qualify, premises generally need to be wholly or mainly used for qualifying activity provided to visiting members of the public. Local authorities are responsible for determining whether individual properties meet the legislative definition.
The Government estimates that more than 750,000 RHL properties will benefit and values the permanent reduction at close to £1 billion a year.
Other mechanisms can reduce the impact of the 2026 changes. These include Small Business Rate Relief, Supporting Small Business Relief and Transitional Relief, depending on the property and the circumstances of the ratepayer.
The new RHL multipliers explained after the April 2026 changes
England now has five principal business rates multipliers for 2026/27.
| Property category | Rateable value | 2026/27 multiplier |
| Qualifying small-business RHL property | Below £51,000 | 38.2p |
| Other small-business property | Below £51,000 | 43.2p |
| Qualifying standard RHL property | £51,000–£499,999 | 43.0p |
| Other standard property | £51,000–£499,999 | 48.0p |
| High-value property, including RHL | £500,000 or more | 50.8p |
The two RHL rates are each 5p below their national equivalents. A qualifying shop below £51,000 rateable value therefore starts at 38.2p rather than 43.2p, while an eligible shop between £51,000 and £499,999 starts at 43.0p rather than 48.0p.
The important cut-off is £500,000. Once a property’s rateable value reaches that level, the RHL multiplier no longer applies and the 50.8p high-value multiplier applies instead. The Government’s impact assessment estimated that just over 21,000 properties would fall within the high-value multiplier at the start of the 2026 list.
Retailers should also look carefully at the final bill rather than simply multiplying the rateable value by the headline figure. For 2026/27, businesses that receive neither Transitional Relief nor Supporting Small Business Relief can also face a temporary 1p Transitional Relief Supplement, introduced for one year to help fund the transitional scheme.
In practical terms, the post-April 2026 system means comparing your new rateable value, the multiplier used by your council and every relief or supplement applied to the account. Looking at only one of those figures can give a misleading impression of whether your rates position has improved.
Small Business Rate Relief and other exemptions
For smaller retailers, Small Business Rate Relief (SBRR) can be substantially more valuable than the difference between the standard and RHL multipliers.
The rules have also become more accommodating for some growing businesses. Where an eligible business takes on a second property on or after 27 November 2025, it can retain SBRR on its main property for 36 months, subject to the detailed eligibility requirements.
The significance of SBRR is visible in the national figures: English councils awarded approximately £2.2 billion through the scheme in 2025/26.
Retailers whose 2026 revaluation causes them to lose some or all of an existing relief should also check 2026 Supporting Small Business Relief (SSBR). This applies to qualifying ratepayers affected by the loss of reliefs including SBRR, Rural Rate Relief, the previous RHL relief and the earlier Supporting Small Business scheme.
One important detail is often oversimplified. SSBR does not necessarily mean that every eligible retailer’s annual increase is limited to £800. For 2026/27, the increase is capped at the greater of £800 or the applicable Transitional Relief percentage cap. Those percentage caps are 5% for properties up to £20,000 rateable value (£28,000 in London), 15% from £20,001 to £100,000 (£28,001 in London for the lower boundary), and 30% above £100,000. The comparison is made with the final 2025/26 bill after the relevant former reliefs.
For example, GOV.UK gives the case of a gift shop whose rateable value increased from £15,000 to £20,000. Because 5% of its previous £4,491 bill was only £225, the £800 element was larger, limiting its new bill to £5,291 under SSBR. By contrast, where the percentage cap produces a figure above £800, that higher figure determines the permitted increase.
What to do if your rates bill has increased
An increased bill after the 2026 revaluation does not automatically mean that anything has gone wrong. However, it is worth checking the calculation before treating the higher cost as unavoidable.
Start by confirming the rateable value itself. The VOA provides an online business rates valuation service through which businesses in England and Wales can inspect their current valuation and property details. The 2026 values reflect rental market conditions at 1 April 2024, rather than today’s rent or necessarily the rent actually being paid under a particular lease.
Property details matter. Incorrect floor area, layout, use or other factual information can affect a valuation. The VOA’s challenge process allows a ratepayer to raise a Check where information is wrong and, where necessary, progress through Challenge and ultimately Appeal. The VOA deals with Checks and Challenges, while appeals in England are handled by the independent Valuation Tribunal.
Next, check whether the council has used the right multiplier. A qualifying occupied retail property below £500,000 should generally fall within one of the two RHL multiplier bands, while a property at £500,000 or above is subject to the high-value multiplier. Eligibility is determined by the local authority under the statutory definition, so a retailer that believes the wrong multiplier has been applied should raise the issue with its council.
The bill should also be checked for Transitional Relief and SSBR. Transitional Relief phases in sufficiently large revaluation-driven increases rather than requiring the entire uplift immediately, and councils apply it automatically where a ratepayer qualifies.
A valuation challenge should not be treated as permission to stop paying. The safest approach is to continue paying the amount legally due while the valuation or relief position is reviewed, and to deal separately with the VOA over valuation issues and the local authority over billing and relief eligibility.
Funding options to manage cash flow alongside rates relief
Business rates relief reduces a cost; it does not necessarily solve the underlying cash flow challenge.
For retailers, business rates sit alongside rent, wages, stock purchases, VAT, utilities and other working-capital requirements. Revenue can also be seasonal, while fixed property costs continue regardless of whether the shop is in a peak or quieter trading period. That can create a timing mismatch even where the annual business rates liability is affordable overall.
Before borrowing, retailers can look at the payment schedule itself. Business rates bills in England are normally set to be paid over 10 monthly instalments, but ratepayers can require their council to allow payment over 12 monthly instalments by contacting it. Spreading the same annual liability across the full year may help reduce monthly peaks without creating a new finance cost.
Cashflow funding
Where a temporary working-capital gap remains, cashflow funding can be considered alongside better debtor collection, stock management and cash-flow forecasting. The key question is whether the finance is bridging an identifiable timing gap that future trading cash flow can realistically repay, rather than simply masking a persistent operating loss.
Business loans
A business loan may be more appropriate where the requirement is larger or relates to a planned expenditure programme rather than a short seasonal fluctuation. Rise Funding describes business loans as one option for easing cash flow or financing a specific project.
In either case, finance should be assessed on its full cost and its impact on future working capital. Interest, fees, repayment frequency, term, security requirements and any personal guarantee should be considered against a realistic cash-flow forecast. Rates relief and finance perform different jobs: relief reduces the tax liability where the business qualifies, whereas borrowing moves cash between periods and creates a repayment obligation.
That makes the order of operations important. First check the rateable value, multiplier and every relief available. Then consider whether payment over 12 months improves the position. Funding is most useful where a genuine cash-flow gap remains after those steps, rather than as a substitute for claiming relief that the business is already entitled to.
If you are looking for a loan, Rise Funding can help find the best option for you. Whether it’s a business loan or others, we’re here to help you make a decision with confidence.
Plus, applying with Rise Funding doesn’t affect business credit.
Contact us via the form below, or get an instant business quote through our online questionnaire.
