From April 2026, business rates have changed for retail, hospitality and leisure businesses in England. Two major changes are happening together. The 2026 revaluation has updated rateable values in England and Wales using 1 April 2024 rental evidence, and England now has lower business rates multipliers for qualifying retail, hospitality and leisure properties.
If you run a shop, restaurant, pub, hotel, gym, salon, leisure venue or similar business, your rates bill from April 2026 may look different from last year. The change could be positive or negative depending on your new rateable value, your property type, your location and any reliefs that apply.
The previous Retail, Hospitality and Leisure relief gave eligible businesses a 75% discount in 2024/25 and a 40% discount in 2025/26, both subject to a £110,000 cash cap per business. From 2026/27, the temporary relief system has been replaced in England by lower RHL multipliers for qualifying properties below £500,000 rateable value.
The Two Changes Happening at Once
It is important to understand that this is not a single change. It is two overlapping changes, and the interaction between them determines your actual bill.
The first is the 2026 revaluation. Every non-domestic property in England and Wales has been given a new rateable value by the Valuation Office Agency, based on estimated open market rental value as at 1 April 2024. Whether your rateable value has gone up, down or stayed broadly the same depends on what happened to rents for your type of property in your location between the last valuation date and April 2024.
The second is multiplier reform in England. From 2026/27, there are 5 national multipliers in England. Qualifying retail, hospitality and leisure properties below £500,000 rateable value benefit from lower RHL multipliers. Properties with a rateable value of £500,000 or more fall into the high-value multiplier.
| Category | 2026/27 Multiplier |
|---|---|
| Small business RHL multiplier, RV below £51,000 | 38.2p |
| Standard RHL multiplier, RV from £51,000 to £499,999 | 43.0p |
| Small business multiplier for non-RHL properties below £51,000 | 43.2p |
| Standard multiplier for non-RHL properties from £51,000 to £499,999 | 48.0p |
| High-value multiplier for properties with RV of £500,000 or more | 50.8p |
This means a smaller qualifying RHL property with a rateable value below £51,000 is charged using the 38.2p multiplier, while a qualifying RHL property between £51,000 and £499,999 is charged using the 43.0p multiplier. A property with a rateable value of £500,000 or more does not receive the lower RHL multiplier.
What This Means for Your Business in Practice
For many smaller RHL businesses, the new lower multiplier gives a more predictable basis for planning than the temporary relief system. Under the old approach, RHL relief was announced year by year, and businesses could not be fully certain what support would apply in the following financial year.
However, this does not mean every RHL business will pay less. The 2026 revaluation has changed rateable values. If your rateable value has increased significantly, your bill may still rise even though the lower RHL multiplier applies. If your rateable value has stayed flat or fallen, the lower multiplier may produce a more favourable result.
The key point is that you need to check the actual bill rather than relying on the headline policy. Your final charge depends on rateable value, multiplier, transitional relief, any other reliefs, local supplements and your council’s calculation.
Working with stockport accountancy services professionals who understand business rates in the context of your broader financial position means you are not trying to work through this calculation in isolation.
Which Businesses Qualify for the Lower RHL Multiplier?
The lower RHL multipliers apply to occupied properties in England that are wholly or mainly used for qualifying retail, hospitality or leisure purposes and have a rateable value below £500,000.
Typical qualifying premises may include:
- Shops and retail units
- Restaurants, cafes, pubs and bars
- Hotels, guest houses and self-catering accommodation
- Cinemas, theatres and music venues
- Gyms, leisure centres and sports facilities
- Hair, beauty and personal care salons
- Nightclubs and certain entertainment venues
Properties that are unoccupied, not mainly used for a qualifying RHL purpose, or have a rateable value of £500,000 or more do not benefit from the lower RHL multiplier. Mixed-use properties need particular care because the main use of the property will matter.
If you are unsure whether your premises qualify, check your bill and speak to your local council. It is better to confirm the classification early than assume the lower multiplier has been applied correctly.
How the 2026 Revaluation Affects RHL Properties
Retail, hospitality and leisure property markets moved in different directions between 2021 and 2024. Town centre retail in many areas continued to face pressure from changing shopping habits and online competition. In some locations, this may have kept rents and rateable values lower.
Hospitality and leisure properties had a more mixed experience. Some areas recovered strongly as travel, events and socialising returned after the pandemic. Others continued to face pressure from reduced footfall, energy costs, staffing costs and weaker consumer spending.
Hotels, restaurants, pubs and leisure venues in strong locations may have seen significant rateable value increases. Traditional high street shops in weaker areas may have seen smaller increases, flat valuations or reductions.
The first step is to compare your new rateable value with your previous one. Then check whether the correct 2026/27 multiplier and any reliefs have been applied.
Transitional Relief in 2026
Transitional relief limits how quickly your business rates bill can rise after a revaluation. For the 2026 revaluation, the increase caps for England are based on rateable value bands.
For 2026/27, the increase cap is:
- 5% for small properties with rateable value up to £20,000, or up to £28,000 in London
- 15% for medium properties above £20,000, or £28,000 in London, and up to £100,000
- 30% for large properties above £100,000
These caps apply to increases caused by revaluation. Your council should apply transitional relief automatically if you qualify. There is no equivalent downward transitional cap in the 2026 scheme, so reductions are generally passed through immediately, subject to the details of the bill and other reliefs.
Keeping your accounts in good order helps you track the phased impact accurately year on year. Our bookkeeping services give you a clear and current record of your overheads, making it straightforward to see how your rates cost is changing relative to the rest of your cost base.
The Cash Flow Impact on RHL Businesses
For many retail, hospitality and leisure businesses, business rates are one of the largest fixed costs after rent, wages and utilities. A meaningful change in either direction has a direct impact on cash flow.
This matters because many RHL businesses are already managing higher wage costs, energy costs, supplier costs and the employer National Insurance changes introduced from April 2025. The employer NIC rate increased to 15%, and the secondary threshold fell to £5,000 per year, although the Employment Allowance increased to £10,500 for eligible employers.
Monitoring your cash position throughout the year rather than only at year-end is essential when several cost pressures are moving at once. Our management accounts for small business service gives you monthly visibility of exactly where your costs stand, so you can see the effect of your rates change in the context of your margins and make decisions accordingly.
Our guide on how poor invoice tracking can damage your cash flow is particularly relevant for hospitality businesses where cash comes in through multiple channels and reconciliation can be complex. Getting the basics of cash management right underpins everything else.
Rates and Your Corporation Tax Position
Business rates are normally an allowable business expense. This means they reduce taxable profit where they are incurred wholly and exclusively for business purposes.
If your rates bill increases, the tax saving on that extra cost is real but partial. For a company paying corporation tax at 19%, an additional £1,000 of business rates reduces corporation tax by £190, leaving a net cost of £810. For companies paying the main rate of 25%, the tax saving would be £250, leaving a net cost of £750. Companies with profits between the small profits limit and main rate threshold may pay an effective marginal rate between those figures.
Understanding corporation tax deadlines in the UK ensures you factor this into your payment planning accurately.
Working with a corporation tax accountant who can model these interactions for your specific business means your tax planning reflects the true position rather than treating rates and corporation tax as separate issues. You can also use our Corporation Tax Calculator to model your liability based on updated figures.
If there are legitimate ways to reduce your corporation tax that have not yet been explored, this is a good time to review them, particularly if your rates bill is increasing and you want to offset the cost where possible.
Employer Costs Alongside Rates
April 2026 rates changes are landing while many RHL businesses are still absorbing higher employer costs from April 2025. Retail, hospitality and leisure businesses often employ large numbers of part-time, variable-hours or lower-paid workers, which means employer NI and payroll costs can be especially significant.
Our guide to employer NI rates explains how the current calculations work, and understanding the 5 payroll problems small employers can avoid is particularly relevant for businesses running complex payroll with variable hours, seasonal workers and tips.
If your business employs staff and you are not already working with payroll services Stockport professionals who handle these calculations accurately, making sure your payroll is running correctly is especially important when costs are already under pressure.
For owners taking salary from their business alongside income generated from the operation, our personal tax accountant services ensure your personal tax position is managed efficiently alongside the business.
VAT and the RHL Sector
Many retail, hospitality and leisure businesses are VAT registered because of the turnover levels involved. For smaller operators approaching the threshold, the decision about when to register needs careful thought. The VAT registration threshold is currently £90,000 of taxable turnover over a rolling 12-month period, and our VAT Calculator lets you model the impact of registration on your margins.
For hospitality businesses, VAT can be complex because food, drink, accommodation and takeaway sales can be treated differently depending on the exact product and circumstances. Getting these classifications right is not just a compliance issue. It directly affects pricing, margins and HMRC risk.
Our guide on understanding VAT registration is a useful starting point, and signs your business needs to register for VAT early covers the indicators that many business owners miss before they find themselves in breach.
Using Cloud Accounting to Track Overhead Changes
When your rates bill, employer NI, wages and other overheads are moving at the same time, you need clear numbers. Spreadsheets and manual records make it harder to track the cumulative effect of multiple cost changes and understand what they mean for profitability month by month.
Xero cloud accounting gives you that visibility. Every cost, including your rates payments, can be captured in your accounts, and reporting tools can show how changes are affecting your margins. Our guide on how Xero can make it easier to stay on top of cash flow explains the specific ways cloud accounting helps with this kind of situation.
If you are still running your business finances through spreadsheets and manual records, our guide to when you should move from spreadsheets to Xero is worth reading. The April 2026 rates changes are a natural prompt to review whether your current systems give you the clarity you need.
Keeping Records Through the Change
The transition to a new rates regime, combined with the revaluation, means your 2026/27 records need to capture your rates liability accurately from the start of the year. If your bill has changed, the figure used in your management accounts should reflect the new amount rather than being carried forward from the previous year.
Small business bookkeeping records that are kept current and reconciled regularly make this straightforward. Our bookkeeping checklists for UK small businesses give a practical month-by-month framework for staying on top of exactly this kind of overhead.
Understanding how management accounts differ from year-end accounts matters here too. Your year-end statutory accounts will capture your full rates cost for the year, but waiting until year-end to discover that your rates increased significantly gives you no opportunity to respond during the year.
The 3 accounting reports every limited company owner should review regularly includes overhead tracking as a core element of monthly financial monitoring, and how management accounts help directors control business spending is a direct read for any RHL business owner who wants to stay in control of costs in a year when several of them are changing at once.
Challenging Your Rateable Value
If you believe the VOA has overvalued your property, you can challenge the assessment through the Check, Challenge, Appeal process. This may be worth considering if your new rateable value seems materially higher than the rent your property could realistically have achieved on 1 April 2024.
You should continue paying your business rates during any challenge. Starting a challenge does not pause your liability, and missed payments can lead to recovery action by your council.
A strong challenge needs evidence. This may include your own lease, rent reviews, comparable property evidence, floor area details, changes in use or evidence that the VOA’s property details are wrong. An adviser who understands both your property and your financials can help you decide whether a challenge is likely to be worthwhile.
Thinking About the Wider Picture
For some RHL businesses, the combined pressure of rates, wages, employer NI, supplier costs, energy costs and squeezed margins is prompting a broader review of the business model. If fixed costs are growing faster than turnover, that conversation about structure, pricing and viability should happen early.
Some business owners are also exploring whether their model could work better in another jurisdiction. Our relocation service dubai uk businesses have been using provides a potential option for those whose business can operate effectively outside the UK and where the overall tax and cost position needs to be reviewed carefully.
For sole traders in the retail or hospitality sector considering whether their business structure remains appropriate, our overview of sole trader advantages versus limited company operation is a useful starting point.
FAQs: Business Rates Changes for RHL Businesses from April 2026
What is the new lower multiplier for RHL businesses and who qualifies?
From April 2026, England has lower RHL multipliers for qualifying occupied retail, hospitality and leisure properties with a rateable value below £500,000. The 2026/27 small business RHL multiplier is 38.2p for properties below £51,000, and the standard RHL multiplier is 43.0p for qualifying properties from £51,000 to £499,999.
Has RHL relief been abolished from April 2026?
The temporary RHL percentage relief that applied in 2024/25 and 2025/26 has been replaced in England by lower RHL multipliers from 2026/27. Other reliefs, such as transitional relief, Small Business Rate Relief and discretionary relief, may still apply depending on your circumstances.
How do I find out my new rateable value from the 2026 revaluation?
Your local council should have issued a 2026/27 business rates bill showing the updated rateable value. You can also check the VOA’s business rates valuation service online and compare your current and previous rateable values.
Can I challenge my new rateable value?
Yes. If you believe your valuation is wrong, you can use the Check, Challenge, Appeal process. You must continue paying your bill while the challenge is ongoing.
What is transitional relief and does it apply to my business?
Transitional relief limits how quickly your business rates bill can rise after a revaluation. Your council should apply it automatically if you qualify. The 2026/27 increase caps in England are 5%, 15% or 30%, depending on your property’s rateable value band.
Will my rates bill definitely go up from April 2026?
No. Your bill depends on your new rateable value, the correct multiplier, reliefs and any transitional protection. Some businesses will pay more, some will pay less and some will see relatively little change.
Do I still qualify for Small Business Rate Relief?
Small Business Rate Relief can apply where your rateable value is below £15,000 and you meet the eligibility rules, usually because the property is your only business premises. Properties with rateable value of £12,000 or below can receive 100% relief, with tapered relief from £12,001 to £15,000.
What should I do if I cannot afford my rates bill?
Contact your local council as early as possible. Councils may be able to discuss payment arrangements or discretionary relief in some cases. If the wider financial position of your business is under pressure, speak to an accountant so you can review cash flow, profitability, tax and overheads together.
Get the Right Support for the Changes Ahead
The April 2026 business rates changes represent a significant shift for retail, hospitality and leisure businesses. Whether your bill has gone up, down or stayed broadly flat, understanding exactly what has changed, what reliefs you are entitled to and how to plan around the new numbers is essential.
At U&W Chartered Accountants, we work with businesses across Stockport and beyond to make sense of these kinds of changes and build them into a coherent financial plan. Whether you need support with accounts, payroll, tax planning or a broader review of your business finances, we are here to help.
Find out more about us on our about page or reach us via our contact page. You can also request an instant quote for your limited company or as a sole trader to see how our services work.
