Overview of the Budget 2025 Business Rates Package
At the Budget on 26 November 2025, the Chancellor announced a comprehensive package of measures to support businesses in England, worth an estimated £4.3 billion over the next five years. This represents one of the most significant reforms to the business rates system in recent years.
The key announcement is the introduction of new retail, hospitality and leisure (RHL) multipliers from April 2026. These multipliers will be set 5p below the relevant national multipliers for qualifying properties with rateable values below £500,000. This relief is funded by a new high-value multiplier that is 2.8p above the national standard multiplier for properties with rateable values of £500,000 and above.
Non-Domestic Rating Multipliers for 2026/27
The Non-Domestic Rating Multipliers for 2026/27 have been confirmed as follows:
| Multiplier Type | Rate (pence in the pound) | Applies To |
|---|---|---|
| Small Business RHL Multiplier | 38.2p | Qualifying RHL properties with RV under £51,000 |
| Small Business Non-Domestic Rating Multiplier | 43.2p | Properties with RV under £51,000 |
| Standard RHL Multiplier | 43.0p | Qualifying RHL properties with RV £51,000 to £499,999 |
| Standard Non-Domestic Rating Multiplier | 48.0p | Properties with RV £51,000 to £499,999 |
| High-Value Non-Domestic Rating Multiplier | 50.8p | Properties with RV £500,000 and above |
The threshold between the standard and small multipliers (less than £51,000 RV) will not change. The regulations to give effect to the new multipliers will be made in due course.
Budget 2025 Business Rates Relief Package
The Chancellor also announced a package of reliefs to support businesses for 2026/27:
To support ratepayers facing large bill increases at the revaluation, the government is introducing a redesigned Transitional Relief scheme worth £3.2 billion. This scheme caps year-on-year increases based on property size:
- Small properties: Caps at 105% (2026/27), 110% (2027/28), 125% (2028/29)
- Medium properties: Caps at 115% (2026/27), 125% (2027/28), 140% (2028/29)
- Large properties: Caps at 130% (2026/27), 125% (2027/28), 125% (2028/29)
A 1p supplement to the relevant tax rate for ratepayers who do not receive Transitional Relief or the Supporting Small Business scheme. This will partially fund Transitional Relief and will apply for one year only from 1 April 2026.
Bill increases for businesses losing some or all of their small business rates relief or rural rate relief will be capped at the higher of £800 or the relevant transitional relief caps from 1 April 2026.
Key improvements for 2026:
- The scheme has been expanded to include ratepayers losing their RHL relief
- The government has announced a one-year extension of the 2023 Supporting Small Business scheme from 1 April 2026
- This support is applied before changes in other reliefs and local supplements
A ten-year 100% business rates relief for:
- Electric Vehicle Charging Points (EVCPs) separately assessed by the VOA
- Electric Vehicle only forecourts
This ensures that these properties face no business rates liability, supporting the transition to electric vehicles.
Small Business Rates Relief: Extended Grace Period
A significant change announced in the Budget is the extension of the Small Business Rates Relief (SBRR) grace period. Previously, when a business expanded into a second property, they could retain SBRR on their original property for one year.
The grace period has now been increased from 1 year to 3 years. This means businesses will remain eligible for SBRR on their first property for three years after expanding into a second property.
Effective date: This applies to businesses expanding after the Budget (27 November 2025). The regulations will be laid in due course.
High-Value Business Rates Multiplier
For properties with rateable values of £500,000 and above, a new high-value multiplier has been introduced at 50.8p (2.8p above the national standard multiplier). This higher rate helps fund the relief measures for smaller businesses.
Call for Evidence: Business Rates and Investment
The government has also announced a Call for Evidence on the impact of business rates and the Receipts and Expenditure valuation method on investment decisions.
Deadline for Responses
The deadline for responses to the Call for Evidence is 18 February 2026.
Businesses and stakeholders are encouraged to participate in this consultation to help shape future business rates policy.
Technical Overview: Transitional Relief Changes
For local authority and private sector specialists, there are important technical changes to how Transitional Relief is calculated for the 2026 revaluation:
- Previous TR schemes were based on the Small Business multiplier with the gap to the national multiplier paid in full (via the amount "U")
- With the move to 5 multipliers for 2026/27, TR will now move onto a "multiplier inclusive" model under which all multipliers will be included within the TR calculation
- The Transitional Relief Supplement (TRS) will also be within TR calculations
- Improvement Relief (IR) has been accommodated in the new TR regulations
- The premium added in the City of London remains outside of TR and is paid in full (subject to other reliefs)
- The Business Rates Supplement in London is also a separate charge outside of TR
Detailed regulations and guidance will be published by the Ministry of Housing, Communities and Local Government in due course.
What This Means for Your Business
You may benefit from the new RHL multipliers at 5p below the national rate, potentially reducing your business rates bill significantly.
The extended 3-year SBRR grace period gives you more flexibility when expanding. The SSB scheme also provides protection against large bill increases.
Properties with RV of £500,000+ will see a higher multiplier. Plan ahead and consider whether any reliefs may apply to offset this.
If you're investing in EV charging infrastructure, the 10-year 100% relief makes this an attractive proposition for your business.
Next Steps
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Calculate Your Current RatesUse our business rates calculator to understand your current liability.
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Check Your RHL EligibilityReview the qualifying criteria for RHL multipliers.
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Plan for 2026/27Budget for changes in your rates bill when the new multipliers take effect in April 2026.
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Stay InformedWatch for the publication of detailed regulations and guidance in the coming weeks.
Source Information
This article is based on the Business Rates Information Letter (5/2025) published by the Ministry of Housing, Communities and Local Government on 26 November 2025.
For the official guidance, visit: Gov.UK: Confirmation of Budget package and the Non-Domestic Rating Multipliers for 2026/2027