The current 2023 Rating List runs until 31 March 2026, so the business rates bill you’ve recently received (covering up to that date) is the last one based on this list. But what happens from 1 April 2026? That’s when the new 2026 Rating Revaluation kicks in - and your rates liability could change significantly.
How are business rates calculated?
The Rateable Value (RV) of a property is essentially its open market rental value, assuming a full repairing and insuring lease. The official definition is:
“The amount equal to the rent at which the property might reasonably be expected to let from year to year, if the tenant pays all usual tenant rates and taxes, and covers repairs, insurance, and other necessary maintenance costs.”
Each Rating List is based on rental values from two years earlier - known as the Antecedent Valuation Date (AVD). For example:
- The 2023 Rating List uses rental values from 1 April 2021.
- The 2026 Rating List will use values from 1 April 2024.
So, if market rents rose by 30% between April 2021 and April 2024, you can expect a similar increase in your property's rateable value - unless other factors come into play. The new levels of assessment have just been published in the Draft Rating List.
Other key factors that affect what you pay
There are two main elements that influence your final business rates bill:
The Uniform Business Rate (UBR)
This multiplier is set by the Government and determines how much tax is collected through business rates. The current UBR is £0.499.
The government has announced the new UBR levels in the Budget. The figures are lower than previously anticipated, which will be welcome news for many ratepayers. There are now five separate UBR multipliers, including:
- A higher rate for large occupiers with a rateable value in excess of£500,000
- Lower rates for retail, hospitality, and leisure properties
This change is designed to offer ongoing support to key sectors, while shifting more of the tax burden to higher-value properties.
Transitional relief
This mechanism is used to phase in significant changes in bills between rating lists, regardless of whether they increase or decrease. From April 2026 no bill will be permitted to increase by more than:
- 5% for small properties - RV less than £51,000
- 15% for medium size properties - RV between £51,000 and £499,999
- 30% for large properties - RV over £500,000
This means very few office properties in the City will receive any transitional relief.
To pay for the rates transition scheme, for 26/27 rate year only, there will be a 1p addition to the rates poundage applied to any property which does not receive transitional relief.
If you're unsure how the 2026 Revaluation could affect your business rates, now’s a good time to start the conversation. We're here to help you plan ahead.
