For decades, business rates have been an essential yet heavily criticised pillar of the UK’s tax system. Raising nearly £25bn annually for Local Authorities and the Government, the system has long been viewed as both indispensable and outdated. As the 2026 revaluation approaches, alongside the most extensive programme of reform in over a decade, we caught up with Jonathan Young, Partner and Head of Business Rates, to learn his thoughts on whether these changes will genuinely make the system fairer, more efficient, and be more reflective of modern commercial realities.
From 1 April 2026, all non-domestic properties in England and Wales will adopt new rateable values, based on open market rental evidence from April 2024. This marks the first revaluation under the new three-year cycle introduced by the Non-Domestic Rating Act 2023. The move aims to ensure valuations track market movements more closely, reducing the lag between economic conditions and business rate liabilities.
For many businesses, particularly in London and major distribution hubs, the shift is expected to be significant. Rising rental values in prime locations and industrial sectors mean some occupiers will see substantial increases. Conversely, businesses in areas with weaker markets may benefit from reduced valuations.
Perhaps the most transformative change is the move from the longstanding two multiplier model to a new five multiplier system, coming into effect in April 2026.
The five multipliers will be:
- Small Business Multiplier
- Standard Multiplier
- Small Retail, Hospitality & Leisure (RHL) Multiplier
- Standard RHL Multiplier
- High Value Property Multiplier for properties with an RV of £500,000+
For the first time, qualifying RHL properties gain permanently lower multipliers, signalling a structural shift in support for high street and consumer facing sectors. Meanwhile, the introduction of a higher multiplier for large properties reflects the Government’s ambition to rebalance burdens away from SMEs and traditional retail and towards high value commercial spaces, including major logistics operators and corporate headquarters.
Recognising the disruption that revaluations can create, the Government has confirmed an expanded package of reliefs and transitional measures:
Transitional relief (2026–2029)
A new three year transitional scheme will cap annual increases in bills, preventing sudden overnight jumps. While upward movements are controlled, decreases will pass through to ratepayers immediately, offering welcome relief for businesses in struggling areas.
Supporting Small Business (SSB) Scheme
Already an important safeguard for smaller occupiers, the SSB scheme is being extended, and enhanced. From April 2026, it will limit annual increases for eligible ratepayers to the higher of £800 or the relevant transitional cap — a valuable buffer for small enterprises caught by sharp valuation movements which now includes eligible business losing their 40% RHL relief.
Small Business Rates Relief (SBRR)
The SBRR grace period is being extended from one year to three years for businesses expanding into a second property, a long-awaited reform aimed at removing the “growth penalty” that has historically hindered SMEs from scaling.
Crossrail Supplement
Properties in London are subject to a supplement of 2p in the pound to supplement the cost of Crossrail. From 1 April 2017 to 31 March 2023, the Crossrail supplement only applied to properties on the local rating list in London with a rateable value above £70,000. On 1 April 2023 this threshold was increased to £75,000 to reflect the impact of the 2023 revaluation of non-domestic properties across England. From April 2026 this threshold will be increased again to £92,000 to reflect the impact of the 2026 national revaluation. It is estimated that 14% of London properties will now be subject to the supplement
Despite the Government’s supportive measures, not all sectors will escape pain. Updated valuation evidence shows that thousands of pubs and hospitality venues, buoyed by post pandemic recovery, face steep rises in rateable values. London, too, remains a sensitive flashpoint: central London offices and retail units, already some of the most expensive premises in the world, will feel the combined effects of higher valuations and the new high value multiplier.
For many landlords and occupiers in high demand hubs such as the City and Westminster, liabilities are set to rise sharply. The challenge will be ensuring these changes do not undermine London’s competitiveness at a time when hybrid working and global economic headwinds are already reshaping commercial demand.
Under the Duty to Notify provisions, which is effective 2029 but crucial to prepare for now, businesses must report key changes, such as new leases, building alterations, and site adjustments, to the Valuation Office Agency (VOA) within strict time limits. Failure to comply may result in escalating penalties. While transparency will improve, the administrative burden on businesses will increase, requiring better internal processes and closer collaboration with property advisors. One upside: ratepayers will gain the right to view more detail on how their valuations have been calculated, addressing long running frustrations around VOA opacity.
Many of the system’s longstanding issues stem from slow processing times, limited, inefficient VOA resources, and cumbersome appeals workflows. Though the Government has committed to reviewing the valuation methodology and improving technological efficiency, businesses may still face significant uncertainty, particularly where leases are short or market conditions volatile. Addressing these resourcing and systems challenges will be critical if the reforms are to deliver fairness in practice, not just on paper.
Whilst new measures introduced under the Non-Domestic Rating Act 2023 such as 3 yearly Revaluations and Improvement Relief have been widely welcomed there is considerable concern over the new 5 multiplier system. Whilst the new permanent lower RHL multiplier for all qualifying premises under RV£500,000 benefits the multiple operators, who was previously capped on relief (maximum £110,000) under the current Covid-19 relief, many smaller operators are now worse off due to a combination of lower relief under the new multiplier and higher assessments following the Revaluation.
To address this, in part, the Government has recently announced additional support for ‘pubs’ but not the wider sector. For the 2026/27-year pubs will receive an additional 15% relief on their bills and for the following 2 years these bills will increase by the rate of inflation only. In addition, there will be a review of the methodology employed by the VOA on the Revaluation particularly in light of the increased operating costs the sector has been subjected to since Covid-19.
Whilst the main target of High Value Property Multiplier is the large warehouse based online retailer, many non-corporate, standard logistic/online operators will now be caught in the net, particularly in the struggling manufacturing sector which is a significant concern.