UK Business Rates explained (2025/26)
Business rates are the commercial equivalent of council tax — a tax on most non-domestic properties like shops, offices, pubs and warehouses. Your bill is your property's rateable value multiplied by a 'multiplier' set by central government, minus any reliefs you qualify for.
Rateable value × multiplier
Every non-domestic property has a rateable value (RV) set by the Valuation Office Agency (VOA) — broadly its estimated annual open-market rent. The current values took effect on 1 April 2023 and reflect rents at 1 April 2021; a new revaluation list applies from April 2026.
You multiply the RV by the relevant multiplier (pence in the pound) to get the gross bill:
- Small business multiplier — 49.9p: used where RV is below £51,000.
- Standard multiplier — 55.5p: used where RV is £51,000 or more.
Small Business Rate Relief (SBRR)
SBRR can wipe out or sharply reduce your bill if you occupy a single property:
- RV £12,000 or less: 100% relief — you pay nothing.
- RV £12,001–£15,000: relief tapers from 100% down to 0% on a sliding scale.
- RV above £15,000: no SBRR, but you still benefit from the lower small-business multiplier up to £51,000.
You generally only get SBRR on one property. Relief is not automatic — apply through your local council.
A shop with £20,000 rateable value
Take a single high-street shop with a rateable value of £20,000:
- RV is below £51,000, so the small-business multiplier of 49.9p applies.
- Gross bill: £20,000 × 0.499 = £9,980.
- RV is above £15,000, so no Small Business Rate Relief.
- Annual bill ≈ £9,980, usually paid over 10 monthly instalments of about £998.
Reliefs beyond SBRR
Depending on your sector and location you may also qualify for retail, hospitality and leisure relief, charitable rate relief (80%), rural rate relief, or transitional relief that caps year-on-year increases. These are not modelled above — check with your council.
Empty property still gets charged
Common business rates mistakes
- Not applying for SBRR. Relief is not automatic — thousands of small firms overpay because they never claimed it from their council.
- Claiming SBRR on multiple properties. You generally only get relief on one property; taking a second occupied unit can cost you the relief entirely.
- Ignoring your right to challenge. If you think your rateable value is too high you can challenge it through the VOA "Check, Challenge, Appeal" service.
- Forgetting empty-property rates. Vacant units are only exempt for three months, then full rates resume.