If you run a retail, hospitality, or leisure business, you could be entitled to significant savings on your business rates.
The current relief scheme in England offers 40% off your rates bill, potentially saving thousands of pounds – but many businesses don’t realise they qualify or understand how to claim.
The relief is worth over £1.5 billion nationally in 2025/26, yet take-up remains patchy. Some businesses assume they don’t qualify, others find the application process confusing, and many simply don’t know the relief exists.
Let’s unpack it all.
What Are Business Rates?
Business rates are a property tax paid by most non-domestic properties in England and Wales.
Think of them as the commercial equivalent of council tax – they’re based on your property’s rental value and help fund local services.
Your annual business rates bill is calculated by multiplying your property’s rateable value by the government’s multiplier rate. For 2025/26, there are two multiplier rates:
- Small business multiplier: 49.9p per £1 of rateable value (for properties worth less than £51,000)
- Standard multiplier: 55.5p per £1 of rateable value (for properties worth £51,000 and above)
Here’s how it works: if your shop has a rateable value of £20,000, your basic rates bill would be £20,000 × 49.9p = £9,980 annually. With 40% relief, you’d save £3,992, bringing your bill down to £5,988.
Finding Your Rateable Value
Your rateable value is set by the Valuation Office Agency (VOA) and represents what your property could be let for on the open market. It’s not the same as your actual rent – it’s the VOA’s assessment of market rental value.
You can find your rateable value in several ways:
- Check your business rates bill – it should be clearly shown on any council tax or rates bill
- Look it up online – search the VOA’s rating list here using your postcode or address
- Contact your local council – their business rates team can tell you the rateable value for your property
The current rateable values were set in April 2023, based on rental levels from April 2021. The next revaluation will happen in April 2026, using rental evidence from April 2024.
If you think your rateable value is wrong, you can challenge it through the VOA. This might be worth doing if your property has changed significantly or if similar properties nearby have lower values.
Recent Changes and What’s Coming
The business rates system has seen significant upheaval recently. A major revaluation took effect in April 2023, updating all property values based on rental levels from April 2021. Many businesses saw their rateable values change substantially.
For 2025/26, the government has frozen the small business multiplier at 49.9p while increasing the standard multiplier to 55.5p. This helps smaller businesses while ensuring the overall tax take remains stable.
Much bigger changes are planned for April 2026. The government has planned to introduce permanently lower multiplier rates for retail, hospitality, and leisure properties, funded by higher rates on large warehouses and distribution centres.
These changes aim to support high streets while ensuring online giants (e.g., Amazon) with huge warehouses pay their fair share.
Who Qualifies for Relief
The scheme covers a broad range of businesses in retail, hospitality, and leisure sectors.
If your property is mainly used for any of these activities, you could qualify for 40% relief on your business rates bill.
- Retail businesses include shops, stores, retail warehouses, markets, petrol stations, and post offices.
- Hospitality businesses cover restaurants, cafés, pubs, bars, hotels, bed and breakfasts, and takeaways. This includes both traditional sit-down establishments and modern delivery-focused operations.
- Leisure businesses include cinemas, theatres, music venues, nightclubs, bingo halls, bowling alleys, gyms, dance studios, and sports clubs. Museums and art galleries also qualify.
The key test is whether your property is “mainly” used for these purposes. If you use part of your premises for other activities – like offices or storage – you can still qualify as long as the eligible activity is the primary use.
How Much You Can Save
The relief provides a 40% discount on your business rates bill for 2025/26. For many businesses, this represents savings of several thousand pounds.
- A typical high street shop with a rateable value of £20,000 would have a basic rates bill of £9,980 (using the small business multiplier of 49.9p). The 40% relief saves £3,992, reducing the bill to £5,988.
- A restaurant with a rateable value of £40,000 would pay £19,960 in basic rates (using the small business multiplier of 49.9p). With 40% relief, they’d save £7,984, bringing their bill down to £11,976.
- A small hotel with a rateable value of £80,000 would use the standard multiplier of 55.5p, giving a basic bill of £44,400. The 40% relief saves £17,760, reducing their annual rates to £26,640.
There’s a cash cap of £110,000 per business group, so very large operations won’t get unlimited relief. But for most small and medium businesses, the cash cap won’t be a limiting factor.
The Application Process
Many councils automatically apply the relief if they believe your property qualifies. If you haven’t received the relief automatically, you’ll need to apply.
The process varies by council, but generally involves completing an application form and providing evidence of your business activities.
Documentation you might need includes:
- Evidence of your business activities (photos, brochures, website pages)
- Confirmation that you occupy the property for business purposes
- Details of any other properties where you’ve claimed the relief
- A declaration that you comply with the cash cap and subsidy limits
The application process can be time-consuming, particularly if your business activities aren’t obviously within the scheme’s scope or if you use your premises for multiple purposes.
Common Eligibility Challenges
Some businesses face challenges proving eligibility, particularly if their operations don’t fit neatly into traditional categories or if they’ve diversified their activities.
- Mixed-use properties often cause confusion. If you run a café with a small retail area, or a pub with letting rooms, you need to demonstrate that the qualifying activity is the main use.
- Online businesses with physical premises sometimes struggle to prove eligibility. A clothes retailer with a showroom that also fulfils online orders should still qualify if customers regularly visit the premises.
- Professional services located in retail areas don’t usually qualify. Solicitors, accountants, and estate agents generally provide services rather than retail, hospitality, or leisure activities.
Recent business changes can complicate applications. If you’ve changed your business model or expanded into new activities, councils may need additional information to assess eligibility.
Subsidy Control and Cash Caps
The relief is subject to subsidy control rules that limit how much government support any business can receive over a three-year period. These rules prevent businesses from receiving excessive state aid that might distort competition.
- The £315,000 limit applies to the total amount of minimal financial assistance your business can receive over three years, including 2025/26. This includes not just business rates relief, but other government grants and support schemes.
- Group company rules mean the cash cap applies across your entire business group. If you operate multiple companies or properties, you need to consider the total relief claimed across all entities.
Breaching these limits can result in demands to repay relief, with interest and penalties. It’s crucial to keep accurate records of all government support received and ensure you stay within the limits.
Getting Expert Help
Business rates relief can provide substantial savings, but the application process and eligibility rules can be complex. At Double Point, we help businesses understand their entitlements and navigate the application process.
We can review your business activities to determine eligibility, help with applications to councils, and ensure you’re claiming all the relief you’re entitled to while staying within the cash cap and subsidy limits.
Think you might be entitled to business rates relief, but not sure where to start? Contact us today for a free consultation. We’ll review your situation and help you claim the relief you’re entitled to.