Business Rates Reduction: Every Way to Reduce Your Bill in 2026
There are more ways to reduce a business rates bill than most businesses realise. Some reductions are applied automatically by your local council. Others require an application. And some — particularly where the underlying rateable value is too high — require a formal challenge through the HMRC Valuation Office. This guide covers every available route, who qualifies, and what action is needed to secure each reduction.
For a dedicated guide to empty property liability and exemptions, see our Empty Property Business Rates guide
The two types of business rates reduction
Business rates reductions fall into two broad categories and it is important to understand the difference.
Reliefs and schemes are discounts or caps applied to your bill by your local billing authority. They reduce the amount you pay but do not change the underlying rateable value. Most are automatic; some require an application.
Rateable value challenges address the valuation itself. If your rateable value is too high, the bill will be too high regardless of what reliefs are applied. Reducing the rateable value through the HMRC Valuation Office's Check, Challenge, Appeal process produces a permanent reduction in both the ongoing bill and a backdated refund — and it applies before reliefs are calculated, compounding the saving.
The most significant long-term reductions typically come from addressing the rateable value directly. Reliefs and schemes are important but many are temporary or tapered, whereas a successful challenge reduces the liability permanently until the next revaluation in 2029.
Small Business Rate Relief
Small Business Rate Relief (SBRR) is one of the most significant reductions available for smaller commercial properties.
Properties with a rateable value of £12,000 or below qualify for 100% relief — meaning no business rates are payable. Properties between £12,001 and £15,000 receive tapered relief on a sliding scale. To qualify, the property must be your only or main business premises.
SBRR is usually applied automatically by your local council. If you believe you are entitled but it has not been applied to your bill, contact your billing authority to request a review — relief can be backdated in some cases.
The 2026 revaluation pushed a significant number of previously eligible businesses above the threshold. If your rateable value increased above £12,000 or £15,000 as a result of revaluation and you believe that increase is too high, challenging the valuation could restore your eligibility.
For a full guide to eligibility, thresholds and what the 2026 revaluation changed, see our Small Business Rate Relief guide
The new RHL multipliers (from April 2026)
From 1 April 2026, qualifying retail, hospitality and leisure (RHL) properties benefit from permanently lower business rates multipliers, replacing the previous annual relief scheme.
For RHL properties with a rateable value below £51,000, the multiplier is 38.2p — significantly lower than the 43.2p applied to non-RHL properties of the same size. For RHL properties with a rateable value between £51,000 and £499,999, the multiplier is 43.0p.
This relief is built into the calculation automatically by your local council based on how your property is classified. If your property qualifies as RHL but a higher multiplier has been applied to your bill, contact your billing authority to query the classification.
Note: while the lower multipliers represent a permanent reduction compared with previous multiplier rates, many RHL businesses are paying more than before because the previous 40% Retail, Hospitality and Leisure Relief scheme ended on 31 March 2026 and is not being renewed.
Transitional Relief
Transitional Relief limits how sharply a business rates bill can rise following the 2026 revaluation. It is applied automatically to your bill by your local council.
The annual increase caps for 2026/27 are:
Transitional Relief applies where your bill has increased as a result of the revaluation. It is a temporary protection — the caps step up in subsequent years until the full liability is reached. It does not change the underlying rateable value.
Note: businesses that do not qualify for Transitional Relief or the Supporting Small Business scheme may have a 1p supplement added to their multiplier for 2026/27 to help fund the scheme.
Supporting Small Business scheme
The Supporting Small Business (SSB) scheme protects businesses whose rates bill increased significantly because they lost eligibility for Small Business Rate Relief, Rural Rate Relief or Retail, Hospitality and Leisure Relief as a direct result of the 2026 revaluation.
Under the scheme, bill increases are capped at the higher of £800 per year or the relevant Transitional Relief percentage cap. The relief is applied automatically — no application is required.
SSB is subject to the UK Subsidy Control threshold of £315,000 across any three-year rolling period. Businesses that have received significant other subsidies should check whether this cap could apply.
Like Transitional Relief, SSB does not change your underlying rateable value. It limits how quickly the full increased liability reaches you — which means if your rateable value is too high, the full overpayment will still be reached once SSB runs out.
Charity and not-for-profit relief
Charities and trustees of a charity are entitled to an 80% mandatory reduction in business rates where the property is wholly or mainly used for charitable purposes.
Local councils also have discretion to award additional relief of up to 20%, potentially bringing the total reduction to 100%. Non-profit making organisations that do not qualify as registered charities may also be eligible for discretionary relief at the council's discretion.
Discretionary relief is not automatic and requires an application to your local billing authority.
For a full guide to reliefs available to charities and not-for-profit organisations, see our Charity Business Rates guide
Rural Rate Relief
Properties in designated rural areas with a population below 3,000 may qualify for Rural Rate Relief. Mandatory 100% relief is available for the sole village shop, sole pub, sole petrol station, sole post office, and sole food shop in a rural settlement — subject to rateable value limits.
Councils also have discretion to award relief of up to 100% to other rural businesses they consider to benefit the local community.
Contact your local billing authority to confirm whether your property falls within a designated rural settlement and whether it qualifies.
Pubs and live music venues relief (2026/27)
Eligible pubs and live music venues in England receive an additional 15% reduction in their business rates bill for the 2026/27 financial year. This relief is applied on top of any other reliefs already in place, including Transitional Relief and the RHL multiplier.
To qualify as a pub, the property must be an occupied public house open to the general public and primarily used for the sale of drinks. Restaurants, cafés, hotels, guesthouses, nightclubs and sporting venues do not qualify under this definition.
To qualify as a live music venue, the property must be wholly or mainly used for live music performances to entertain an audience. Other activities must be incidental to this primary use.
The relief is applied automatically to qualifying premises — no application is required. If you believe your property qualifies but the relief has not been applied, contact your local billing authority.
Hardship relief
Local councils have discretion to reduce or waive business rates where a ratepayer would experience hardship and where granting relief would be in the interests of the local community. Both conditions must be satisfied.
Hardship relief typically requires evidence of financial difficulty — including recent accounts, trading position and details of outstanding liabilities — and a demonstration of the property's community value. It is rarely awarded and is assessed entirely at the council's discretion.
Contact your local billing authority to discuss eligibility and the application process.
Local disruption relief
A temporary reduction in business rates may be available where the value of a property is affected by severe local disruption — such as flooding, major roadworks, or significant nearby construction activity.
To apply, notify the HMRC Valuation Office through your business rates valuation account. The Valuation Office will determine whether the disruption has materially affected the property's value and for what period.
This route is separate from a formal rateable value challenge and does not require the same level of comparable rental evidence. It is particularly relevant where access, footfall or trading has been disrupted by factors outside your control.
Challenging your rateable value
The above reliefs and schemes all operate on top of your existing rateable value. If the rateable value itself is too high, you will be overpaying even after all available reliefs are applied.
A successful challenge through the HMRC Valuation Office's Check, Challenge, Appeal process reduces the rateable value directly. This has two effects: the ongoing annual bill falls permanently, and any overpayment from the date the Check was submitted may be refunded.
Common grounds for a challenge include comparable properties nearby being assessed at lower levels, your current rent being materially below your rateable value, or factual errors in the property record.
A free eligibility check compares your property against similar properties using publicly available HMRC Valuation Office data and gives an immediate indication of whether a challenge may be worthwhile.
For a full guide to the process, see our Business Rates Appeal guide
Material Change of Circumstances
If a physical or environmental change has affected your property since the valuation date — such as nearby construction, loss of parking, changes to road access, or a significant change in local conditions — this may qualify as a Material Change of Circumstances (MCC).
An MCC allows a review of the rateable value outside the normal revaluation cycle, potentially producing a reduction that is backdated to the date of the change.
For a full guide to what qualifies, see our Material Change of Circumstances guide
How to check which reductions have been applied to your bill
Your business rates bill issued by your local council should set out any reliefs applied and the rateable value used in the calculation. If you are unsure whether all available reductions have been applied:
Check your bill carefully — each relief should be listed separately with the amount of reduction shown.
Contact your local billing authority — they can confirm which reliefs are on your account and whether any outstanding applications need to be submitted.
Check your rateable value — log into your business rates valuation account on GOV.UK to confirm the rateable value being used and whether any challenges are in progress.
Run a free eligibility check — our rateable value checker indicates whether your rateable value appears to be in line with comparable properties and whether a formal review may add further value.