How business rates are calculated
Business rates in England are worked out in three steps: take the property's rateable value, multiply it by the right multiplier, then deduct any reliefs. The rateable value is set by the Valuation Office Agency (VOA) and broadly reflects the annual rent the property could have been let for on the valuation date. New values from the 2026 revaluation took effect on 1 April 2026, so use your 2026 list value, not the one from 2023.
Your local council does the calculation and sends the bill. The business rates year runs from 1 April to 31 March.
The five multipliers for 2026/27
From 1 April 2026 England moved from two multipliers to five. Which one applies depends on the rateable value and, below £500,000, on whether the property is a qualifying retail, hospitality or leisure (RHL) property.
| Rateable value | Most properties | Qualifying retail, hospitality or leisure |
|---|---|---|
| Below £51,000 | 43.2p (small business) | 38.2p (small business RHL) |
| £51,000 to £499,999 | 48p (standard) | 43p (standard RHL) |
| £500,000 or more | 50.8p (high-value) | 50.8p (high-value) |
The small business multiplier applies to every property below £51,000, whether or not it gets small business rate relief. The multipliers may be different in the City of London.
Which properties qualify for the RHL multipliers
The lower multipliers replace the 40% retail, hospitality and leisure relief that ran until 31 March 2026. Unlike that relief there is no cash cap, so every qualifying property in a chain benefits. To qualify, a property must be occupied and used wholly or mainly to provide retail, hospitality or leisure to visiting members of the public. Shops, cafés, restaurants, pubs, hotels, gyms, hairdressers and cinemas usually qualify. Offices, banks, warehouses for online orders and premises closed to the public do not. Your council decides, applying the Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025.
Small business rate relief
If your business uses only one property and its rateable value is £12,000 or less, you pay no business rates at all. Between £12,001 and £15,000 the relief tapers on a straight line from 100% to nothing: a rateable value of £13,500 gets 50% off and £14,000 gets about 33% off.
- Second property. If you take on another property, you keep relief on the main one for 36 months (12 months if you acquired it before 27 November 2025);
- Small extra properties. After that you keep relief only if none of the other properties has a rateable value above £2,899 and the total is under £20,000 (£28,000 in London);
- Charities. You cannot have small business rate relief and charitable rate relief at the same time.
The 1p transitional relief supplement
For 2026/27 only, properties that existed before the revaluation and are not receiving transitional relief or supporting small business relief pay an extra 1p on their multiplier. The supplement is added before reliefs, so a property on 100% small business rate relief still pays nothing. Tick the box in the calculator if it applies to you; your bill will show it as a separate line.
Worked example
A design studio occupies a single office with a 2026 rateable value of £25,000. It is not a retail, hospitality or leisure property.
- Multiplier. The rateable value is below £51,000, so the small business multiplier of 43.2p applies;
- Bill before relief. £25,000 × 0.432 = £10,800;
- Small business rate relief. None, because the rateable value is above £15,000;
- Annual bill. £10,800, or £11,050 if the 1p supplement applies.
A café with a rateable value of £40,000 would use the 38.2p small business RHL multiplier instead, giving a bill of £15,280.
If your bill has gone up
Transitional relief phases in increases caused by the revaluation. In 2026/27 a bill can rise by no more than 5% for rateable values up to £20,000 (£28,000 in London), 15% up to £100,000 and 30% above that. Businesses losing some or all of their small business, rural or retail, hospitality and leisure relief may get supporting small business relief instead, which caps the increase at the higher of £800 or those percentages. Pubs and live music venues also get 15% off their 2026/27 bills. Councils apply these automatically, which is why your actual bill may be lower than this estimate.
Changes from April 2027
Budget 2026, published on 28 October 2026, announced changes for England from 1 April 2027. None of them affects 2026/27 bills:
- New multipliers. 44.7p (small business), 49.7p (standard), 39.5p and 44.5p for retail, hospitality and leisure properties, and 52.5p for high-value properties;
- Higher relief thresholds for RHL properties. Small business rate relief for qualifying retail, hospitality and leisure properties will give 100% relief up to £18,000 and tapered relief up to £21,000, up from £12,000 and £15,000;
- Real-terms freeze. Bill increases for qualifying RHL properties will be capped at CPI inflation in 2027/28 and 2028/29, except where the rise comes from improvements or from losing other reliefs;
- Pubs and live music venues. Relief for pubs, social clubs and all but the largest live music venues rises from 15% to 35%;
- Transitional relief supplement. The 1p supplement is extended for two more years;
- Vape shops and adult gaming centres. Both lose the RHL multipliers, and vape shops also lose small business rate relief.
What this calculator does not cover
- Wales, Scotland and Northern Ireland. Each has its own multipliers and reliefs;
- Transitional and supporting small business relief. These depend on your 2025/26 bill, which only your council holds;
- Other reliefs. Charitable, rural, empty property, improvement, hardship, enterprise zone and freeport relief, and the 100% relief for eligible electric vehicle charge points that runs for ten years from 1 April 2026, are not applied;
- Supplements. The London business rate supplement and the City of London premium are not included;
- Part-year bills. The result is for a full year of occupation.
Getting it right
An inaccurate rateable value or a missed relief can cost a small business thousands a year. Our business tax advisers review rates bills alongside your wider tax position, and our hospitality accountants help pubs, cafés and hotels claim the RHL multipliers. If you are VAT registered, try our VAT Flat Rate Scheme calculator.