In today’s Budget, Chancellor Rachel Reeves has missed the mark on the Government’s commitment to introduce permanently lower business rates for the retail, hospitality and leisure sector, says Prop-Search.
The Government has announced that from April 2026, a new uniform business rates multiplier – used to calculate a property’s business rates liability – will come into effect for retail, hospitality and leisure properties (RHL). This will be set 5p below the relevant national multipliers for qualifying properties with rateable values below £500k and will be funded by a high-value multiplier, 2.8p above the national standard multiplier for properties with rateable values of £500,000 and above.
The Non-Domestic Rating Multipliers for 2026/27 will be as follows:
- Small business RHL multiplier: 38.2p
- Small business non-domestic rating multiplier: 43.2p
- Standard RHL multiplier: 43.0p
- Standard non-domestic rating multiplier: 48.0p
- High-value non-domestic rating multiplier: 50.8p
Samantha Jones, an Associate Director of Prop-Search, said: “This move is apparently the Chancellor’s commitment to support our High Streets and create a level playing field between the traditional small retailer and those online giants operating from large distribution warehouses.”
“However, the downside to the two-tier system is that in reality it won’t be just the online giants that will bear the brunt of rising costs, but also large supermarkets, wholesalers and discount retailers, as the vast majority of their property portfolios will exceed the £500,000 rateable value threshold. So the question is, will these tax increases be passed down to their customers through a hike in the cost of the weekly shop or perhaps they will look to their supply chain to reduce their prices?”
Furthermore, the Government is removing the 40% business rates relief for High Street retailers that is currently in force until April 2026. This means that a retailer with a Rateable Value of £25,000 was paying £7,485 when its £12,475 rates bill had the 40% relief applied. Whilst the new £38.2p multiplier may be lower, it in fact means in this instance that the business’s rates bill would be higher – £9,550 to be precise.
