Business Rates: Tax Allowances
(asked on 5th December 2025) - View Source
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many and what proportion of retail, hospitality and leisure businesses will be eligible to receive transitionary relief for business rates in 2026-27.
At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since Covid, which has led to significant increases in rateable values for some properties as they recover from the pandemic.
To support with bill increases, at the Budget, the Government announced a support package worth £4.3 billion over the next three years. This includes a redesigned transitional relief scheme which caps bill increases, and is worth £3.2 billion over the next 3 years, and a supporting small business (SSB) scheme capping bill increases for the smallest businesses losing some or all of their small business rates relief or rural rate relief worth over £500 million. The Government has gone further, by expanding this to ratepayers losing RHL relief to offer further support worth an additional £1.3 billion as they transition to permanently lower tax rates.
As a result, over half of all ratepayers will see no bill increases, including 23% seeing their bills go down. This means most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest.
More broadly, the Government is delivering a long overdue reform to rebalance the business rates system and support the high street, as promised in our manifesto.
The Government is doing this by introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties, including pubs. These new tax rates are worth nearly £900 million per year, and will benefit over 750,000 properties.
The new RHL tax rates replace the temporary RHL relief that has been winding down since Covid. Unlike RHL relief, the new rates are permanent, giving businesses certainty and stability, and there will be no cap, meaning all qualifying properties on high streets across England will benefit.