Small business rate relief in England removes business rates entirely on a property with a rateable value of £12,000 or less and tapers away to nothing at £15,000, as long as the business occupies only one property. A business that takes on a second property keeps the relief on its main property for 12 or 36 months, and after that only if every other property has a rateable value of no more than £2,899 and the combined rateable value is under £20,000 (£28,000 in London).

Who qualifies for small business rate relief?

Small business rate relief is given by your local council, which is the billing authority for business rates. GOV.UK sets two conditions: the property’s rateable value must be less than £15,000, and the business should use only one property, although relief can continue in some cases where it uses more. You cannot receive small business rate relief and charitable rate relief at the same time, and the council decides which one applies.

Rateable value is the Valuation Office estimate of the property’s open market rental value on 1 April 2024. That valuation date feeds the rating list that took effect at the revaluation on 1 April 2026, which is why some occupiers found their relief changed this year even though nothing about their premises did. If you think the figure is wrong, the challenge goes to the Valuation Office through the business rates valuation account, not to the council.

How much relief does a single property get?

A business using only one property pays no business rates if the rateable value is £12,000 or less. Between £12,001 and £15,000 the relief falls gradually from 100% to 0%. The examples on GOV.UK show how the taper works in practice:

Rateable value Relief on the bill
£12,000 or less 100%
£13,500 50%
£14,000 33%
£15,000 or more No small business rate relief

The relief is applied to the bill the council works out by multiplying the rateable value by the multiplier for the year, so the percentage reduces the whole charge rather than a slice of it.

What happens when the business takes on a second property?

This is where most errors arise. When a business acquires a second property, it keeps getting relief on its main property for a fixed run off period. That period is 12 months if the second property was acquired before 27 November 2025, and 36 months if it was acquired on or after that date.

Once the run off period ends, relief on the main property continues only if both of these conditions are met:

  • none of the other properties has a rateable value above £2,899; and
  • the total rateable value of all the properties is less than £20,000, or £28,000 in London.

The relief is always on the main property. The other properties are billed in the normal way, although each will usually use the small business multiplier if its own rateable value is below £51,000.

Illustration only. A florist occupies a shop with a rateable value of £9,000 and in January 2026 rents a small storage unit with a rateable value of £2,500. Because the unit is not above £2,899 and the combined total of £11,500 is under £20,000, the shop keeps full relief indefinitely. The unit is billed at the small business multiplier of 43.2p, which gives £1,080 for 2026 to 2027 before any other relief. If the unit had a rateable value of £6,000 instead, the shop would keep its relief only for 36 months from the date the unit was taken on. After that the shop would be billed in full at £9,000 times 43.2p, which is £3,888 a year.

Which multiplier applies if you get no relief?

A property with a rateable value below £51,000 is billed using the small business multiplier, even if it does not receive small business rate relief. For 1 April 2026 to 31 March 2027 the figures for England outside the City of London are:

  • 48p in the pound for most properties with a rateable value of £51,000 up to £499,999, and 43.2p below £51,000;
  • 43p and 38.2p respectively for eligible retail, hospitality and leisure properties;
  • 50.8p for any property with a rateable value of £500,000 or more.

The lower retail, hospitality and leisure multipliers replaced the retail, hospitality and leisure relief. No new claims for that relief can be made for periods from 1 April 2026, although the council can still deal with claims for earlier years.

What if the 2026 revaluation reduced your relief?

Supporting small business relief protects occupiers who lost some or all of their small business rate relief, rural rate relief, retail, hospitality and leisure relief or the 2023 supporting small business relief because of the revaluation. For 2026 to 2027 the bill cannot rise by more than the greater of £800 or a percentage of the 2025 to 2026 bill: 5% where the rateable value is up to £20,000 (£28,000 in London), 15% up to £100,000 and 30% above that. The council adjusts the bill automatically.

Separately, transitional relief phases in increases caused by the revaluation. For a property worth up to £20,000 (£28,000 in London) the cap is 5% in 2026 to 2027, then 10% plus inflation and 25% plus inflation in the following two years. Transitional relief is applied first, before other reliefs.

What other business rates reliefs are available?

Rural rate relief
Full relief for the only general store, food shop or post office in an eligible rural area with a population below 3,000 and a rateable value up to £8,500, or the only pub or petrol station with a rateable value up to £12,500. The property must be occupied.
Charitable rate relief
Up to 80% off for property used mainly for charitable purposes by a charity or a registered community amateur sports club. The council can top this up with discretionary relief.
Empty property relief
No rates for 3 months after a property becomes empty, with a further 3 months for industrial premises. Listed buildings and properties with a rateable value under £2,900 stay relieved until reoccupied.
Improvement relief
One year of relief on the increase in rateable value from qualifying works completed on or after 1 April 2024 that enlarge the property or add new features, provided you occupied it during and after the works.
Pubs and live music venues relief
15% off bills for 2026 to 2027 for qualifying pubs and live music venues, available alongside transitional and supporting small business relief.
Hardship and local discretionary relief
Councils can grant relief where a business would be in financial difficulty without it and helping it is in the interests of local people.

What mistakes do occupiers make?

  • Not telling the council about a second property. GOV.UK warns that the new rate usually applies from the day circumstances changed, so a late report produces a backdated bill.
  • Assuming the run off is always 36 months. A second property acquired before 27 November 2025 only had 12 months.
  • Forgetting that a tiny second unit still counts towards the £20,000 total, and that one unit above £2,899 ends the relief after the run off on its own.
  • Expecting a holiday let to qualify automatically. It must first pass the letting tests to be rated as a business, which are covered in holiday lets: business rates or council tax. If it fails them it pays council tax, and possibly a premium explained in council tax premiums on second and empty homes.
  • Leaving a property empty without telling the council. Relief only starts once the council knows, and periods between lets have their own tax treatment, covered in empty property costs between lets.

Business rates are a local tax and sit outside HMRC, but the bill feeds directly into business profits, so it is worth reviewing alongside the figures in UK tax rates and thresholds for 2026 to 2027 and the general rules on allowable business expenses.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.