What's happening in England?
The UK Government has confirmed that from April 2026, it will introduce permanently lower business rates multipliers for retail, hospitality and leisure ("RHL") properties that have a rateable value under £500,000. This reduction will be funded by a higher multiplier on all properties, across all sectors, with a rateable value over £500,000.
Those RHL businesses with portfolios of properties with rateable values under £500,000 could therefore see a reduction in their business rates bill in England.
This measure aims to target large distribution centres used by online retailers (as these large warehouses are likely to have a rateable value exceeding £500,000). However, it is also likely that most large retail outlets, hotels, and supermarkets will have a rateable value above £500,000 and could be subject to an increased rates bill from April 2026.
The next revaluation date in England will also take place on 1 April 2026 and there may be some uncertainty about whether some properties will fall under or over the £500,000 threshold, making it difficult for businesses to plan. The Government plans to publish the new multipliers alongside the UK Budget this autumn.
What's happening in Wales?
The Welsh Government has recently consulted on making similar business rates changes in Wales.
The Welsh Government proposes that from 1 April 2026, there will be:
- a lower multiplier for "shops, kiosks or post offices" that have a rateable value less than £51,000; and
- a higher multiplier for all premises with a rateable value over £100,000 (with some exemptions e.g. for leisure centres and museums).
Although similar to the English model, the lower multiplier will only apply to a narrower group of outlets (shops and kiosks) and the threshold at which the higher multiplier will apply is much lower than proposed in England.
This highlights the growing disparity between different jurisdictions of the UK and the need for businesses holding a portfolio of properties to navigate different regimes across the UK.
Business rates in Scotland
Key differences in Scotland include different thresholds for rates (basic, intermediate and higher) depending on the rateable value of the property, with a tone (valuation) date of one year (rather than two in England). At its most recent Budget, the Scottish Government froze the multiplier for the basic property rate, with other rates rising with inflation, and confirmed a limited 40% relief for small properties in the hospitality sector with a cap of £110,000 per business, and a temporary 100% relief for hospitality premises in the islands.
Notably, the Scottish Government has shelved plans to reintroduce a public health supplement on larger retailers, which would have seen an additional business rates charge on those selling alcohol or tobacco products.
What's the takeaway?
Retailers and hotels with larger premises across the UK are likely to see increases to their business rates bills as well as increased compliance obligations that differ across the UK over the coming years. Navigating these changes and planning for potential increases will be a critical part of business and tax plans.
If you have any questions or would like to discuss business rates in more detail, please contact our Tax specialisits or your usual DWF contact.
