Business rates relief 2027 raises the small business rates relief threshold to £18,000 of rateable value for retail, hospitality and leisure premises in England, starting on 1 April 2027. Until then, the threshold stays at £12,000, so your current bill does not move. If your shop, café, pub, salon, guest house or gym occupies premises rated at £18,000 or less, your business rates bill drops to nothing from that date. The government says around 70,000 properties come out of business rates entirely.
The Chancellor, John Healey, announced the change in Budget 2026 on 28 October 2026. From 1 April 2027, the threshold for 100% Small Business Rates Relief for qualifying Retail, Hospitality and Leisure properties in England will rise from £12,000 to £18,000 of rateable value. The tapered relief limit will also rise from £15,000 to £21,000.
Two things follow from that. First, a qualifying RHL property with a rateable value between £12,001 and £18,000 could move from partial relief to 100% relief. Second, the higher thresholds apply only to qualifying RHL properties. Other eligible small businesses remain under the existing £12,000 full-relief and £15,000 tapered-relief thresholds.
Alongside this change, the budget confirmed a two-year real-terms freeze for qualifying RHL properties in 2027/28 and 2028/29. In practice, eligible bill increases will be capped by CPI inflation, subject to exceptions such as increases caused by property improvements or the loss of certain reliefs.
Qualification depends on the property, not on the business’s turnover or profit. Three tests decide it.
The first is property type. RHL covers the premises the government treats as retail, hospitality or leisure: shops, cafes, restaurants, pubs, bars, hotels, guest houses, cinemas, music venues, gyms and similar. Your council publishes the detailed criteria, and it is worth confirming your classification rather than assuming it, because a change of use can move a property in or out of the eligible list.Our retail store accountants support shops and high street businesses with accounting, tax and financial reporting.
The second is a rateable value. £18,000 or less attracts full relief. The rateable value is the figure the Valuation Office Agency sets for the property, and it appears on your bill. It is not your rent, your turnover or your profit, which is the single most common misunderstanding about business rates.
The third is occupancy. The person or company occupying the property pays the bill and claims the relief. If you rent your premises, that is you rather than your landlord.
England only, for a simple reason: the devolved administrations run their own rates. Rates in Scotland, Wales and Northern Ireland run on separate systems with their own reliefs and thresholds, so a Scottish shop does not get this change. A further rule to know is the cap on relief where one business occupies several properties, which limits the total relief available across a portfolio.
Full relief stops at the threshold, but the relief does not vanish at that point. Small business rates relief tapers: a property rated just above £18,000 still receives some relief, and the amount reduces as rateable value climbs, reaching nil at £51,000.
That taper is why the cliff edge some business owners fear does not quite exist. A café rated at £19,000 gets partial relief from April 2027 rather than being cut off entirely, and its bill rises gradually as its rateable value rises. The exact relief percentage depends on the rateable value and the multiplier your council applies, so the authoritative figure is the one on your recalculated bill. Our budgeting and forecasting services can help estimate how a revised business rates bill may affect monthly cash flow and operating budgets.
Three illustrations show the shape of it without pretending to quote a bill we cannot calculate for you:
One practical warning: councils reissue bills once they set the new year’s multipliers and reliefs, and those bills arrive in February and March. If your bill in spring 2027 still shows the old threshold, challenge it rather than paying it, because you claim relief through the bill.
Five steps, and none of them take long.
There is also a planning angle worth a conversation: if you were considering expanding into the unit next door, the combined rateable value may push you above the threshold and cost you the relief. Timing an acquisition before or after 1 April 2027 can be worth real money, and it is the sort of decision worth modelling rather than guessing.Our tax planning services can help you review the wider tax impact before making expansion or property decisions.
No. It applies to retail, hospitality and leisure premises in England. Other sectors keep the £12,000 threshold for full relief.
Neither. It rests on rateable value, which the Valuation Office Agency sets from the property’s rental value rather than from your trading results.
No. The devolved administrations run their own reliefs, thresholds and multipliers.
The occupier pays business rates and receives the relief. If your lease recharges rates through a service charge, check that the amount you pay reflects the relief.
No. The current bill stands until 31 March 2027, and the new threshold applies from 1 April 2027.
Business rates sit alongside the taxes we already handle for shop, hospitality and leisure clients, and the interaction matters. Relief changes affect your cash flow forecast, your pricing and sometimes your decision to take on another premises, and those are commercial judgements rather than form-filling.
Our team deals with VAT, payroll, bookkeeping and year-end accounts for small businesses across the UK, and we regularly model the effect of a rate change against your profit and your plans.Limited companies can also use our Corporation Tax services to manage company tax alongside wider property and operating costs.
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