How Business Rates Are Calculated
Business rates are calculated as: Rateable Value × Multiplier. The Rateable Value (RV) is set by the Valuation Office Agency (VOA) and is based on the annual rental value of your property on the relevant antecedent valuation date. From April 2023, rateable values were updated based on 1 April 2021 market rents — the first revaluation since 2017.
The standard multiplier for 2025/26 is 55.5p per £1 of rateable value. The small business multiplier is 49.9p. You qualify for the small business multiplier if your property's RV is below £51,000.
Small Business Rate Relief (SBRR)
If you occupy one property with a rateable value below £15,000, you qualify for Small Business Rate Relief:
- RV below £12,000: 100% relief — no rates payable
- RV between £12,001 and £15,000: Relief tapers from 100% down to 0%
You must apply for SBRR through your local council. It is not automatically applied. If you have never applied, check your RV now — you may be owed backdated relief.
Retail, Hospitality, and Leisure Relief (2025/26)
The government extended the Retail, Hospitality and Leisure (RHL) relief for 2025/26 at 40%, capped at £110,000 per business. This means retailers occupying properties with eligible use can claim 40% off their rates bill before SBRR. RHL relief is applied automatically by councils for qualifying properties.
Empty Property Relief
An empty property is exempt from rates for the first three months (six months for industrial properties). After that, the full rate applies. Most exemptions apply during the initial empty period: if you take a lease but cannot trade immediately, you may qualify for the initial exemption period.
Challenging Your Rateable Value
If you believe your rateable value is too high, use the VOA's Check, Challenge, Appeal (CCA) process via the GOV.UK business rates valuation service. The process requires:
- Check: Review and confirm your property details are accurate
- Challenge: Submit a formal challenge with evidence of a lower rental value
- Appeal: If the Challenge is rejected, appeal to the Valuation Tribunal for England
Evidence for a successful challenge includes: rental evidence from comparable properties, evidence of any physical changes to your property, and evidence of unusual factors depressing rental values in your area.
