The government has announced permanent changes to business rates that will benefit thousands of small firms in the retail, hospitality and leisure sectors. From April 2026, qualifying businesses will see their bills reduced, with some enjoying discounts of up to 40%.
What has changed?
Business rates have long been a concern for high street shops, restaurants, pubs, and leisure operators. Rising property costs, combined with tight margins, have made rates one of the biggest overheads for many.
In a move designed to support growth, the government has confirmed:
- A permanent business rates discount of 40% for eligible retail, hospitality and leisure premises with a rateable value below £500,000.
- A freeze of the small business multiplier, to prevent rates bills from rising in line with inflation.
- The continuation of business rates improvement relief, so that firms making property improvements will not face immediate increases in their bills.
The government estimates that around 250,000 businesses will benefit from these measures, giving a much-needed boost to high streets and town centres across the UK.
Who qualifies?
The discount applies to occupied properties that are wholly or mainly used as:
- Shops.
- Restaurants, caf�s, pubs or bars.
- Cinemas, gyms, or other leisure facilities.
- Hotels, guesthouses or self-catering accommodation.
Properties with a rateable value of £500,000 or above will not be eligible, and relief is subject to subsidy control limits for larger groups.
Why is this being introduced?
The government has stated that the aim is to “level the playing field” between high street operators and online retailers, who do not face the same property-based costs. The measures are also intended to encourage investment in local communities by making it more affordable to run physical premises.
For many small businesses, the changes could mean significant annual savings, freeing up cash to invest in staff, marketing, or refurbishments.
What to do next
Although the relief will not take effect until April 2026, it makes sense to review your property situation now. Points to consider include:
- Checking your property’s rateable value to confirm eligibility.
- Reviewing your business structure if you operate from multiple premises.
- Considering whether improvements to your premises could be planned with improvement relief in mind.
- Budgeting ahead, as although relief is generous, it may not cover all increases in costs.
How we can help
We can review your current rates position, check eligibility for the new reliefs, and advise on planning around the April 2026 changes.
If you operate in the retail, hospitality, or leisure sectors, please contact us so we can confirm how these new rules will affect your business and ensure you make the most of the available reliefs.