Business Rates
The Non-Domestic Rating (Multipliers and Private Schools) Bill
The recent Autumn Budget introduced some significant changes to Business Rates, some of which require new legislation. The Non-Domestic Rating (Multipliers and Private Schools) Bill is currently progressing through Parliament and is expected to be finalised soon.
This legislation focuses on two key policy areas:
Removal of charitable rate relief from private schools
From 1 April 2025, private schools in England will no longer be eligible for charitable rate relief.
Reduced Uniform Business Rate (UBR) for Retail, Hospitality and Leisure (RHL) properties – 2026-27 onwards
- From April 2026, the Government will introduce a permanently lower UBR for RHL properties with a Rateable Value (RV) below £500,000
- The biggest UBR reduction will apply to properties with an RV under £51,000
- Properties with RV’s between £51,000 and £500,000 will receive a smaller UBR reduction.
- The levels of the reduced UBR’s will be announced in the 2025 Autumn Budget, taking into account the projected impact of the 2026 Rating Revaluation
- The cost of these cuts will be covered by raising the UBR on properties with an RV of £500,000 or more.
Potential UBR Changes Under the Draft Legislation
- The Government will have the power to reduce the UBR by up to 20p below the standard rate.
- If the current UBR for small properties (49.9p) remains unchanged in 2026-27, the full 20p reduction would lower it to 29.9p, representing a 40% cut.
- RHL properties with RV’s between £51,000 and £500,000 will receive a smaller UBR reduction.
- Conversely, the Government will also have the power to increase the UBR by up to 10p for all other property sectors with an RV of £500,000 or more.
- If the current large UBR (55.5p) remains unchanged in 2026-27, a full 10p increase would raise it to 65.5p, representing an 18% rise in business rates. This increase is expected to apply to all properties with a 2026 RV of £500,000 or more.
Who Will Be Affected?
The majority of RHL properties are set to benefit from this permanent cut in the UBR.
Although the UBR increase will be payable, as intended, by the online retail giants on their distribution warehouses there will be a wide range of other property types which will also be liable for a rates increase of up to 18% such as Universities and Hospitals. In addition, many of the large anchor retail stores who help drive footfall to the High Street will be faced with having to pay the rates increase to support the implementation of lower rates bills for other, often competing, retailers. In certain high value retail locations such as London’s Oxford Street potentially up to 50% of the shop units will be liable for an 18% rates increase.
The Government has not yet confirmed the exact eligibility criteria for classification as an RHL property.
2025-26 Retail Rates Relief cut to 40%
2025-26 will be the final year of the retail rates relief scheme which has been in place since 2020-21. The relief in 2025-26 is being cut from the previous level of 75% to 40%. Many businesses have become reliant on this relief and a significant number of ratepayers will see a dramatic increase in their 2025-26 rate liability.
2026 Rating Revaluation
The Government’s Valuation Office are currently preparing for the 2026 Rating Revaluation which will take place on 1 April 2026. This will place new Rateable Values on every property based on rental levels prevailing on 1 April 2024. The draft 2026 Rateable Values will be released towards the end of the year.