Introduction to Business Rates
Business rates are a crucial part of the UK tax system, representing a significant expense for companies occupying non domestic properties such as offices, retail stores, industrial units, and leisure facilities. The business rates system is designed to ensure that businesses contribute fairly to local services, with liabilities calculated based on the rateable value of each property.
The Valuation Office Agency (VOA) is responsible for determining these rateable values, using evidence of rental values and market trends to assess what each property would reasonably command in rent on a set valuation date. These rateable values form the foundation for calculating business rates liabilities, which are then collected by local billing authorities.
With the government’s ongoing reforms, the business rates system is set for significant change from April 2026. The introduction of a new multiplier structure will see two lower multipliers applied to retail, hospitality, and leisure properties with rateable values below £500,000, providing long term certainty and targeted support for small businesses in these sectors. In contrast, properties with rateable values above £500,000 will be subject to a higher multiplier, which is expected to result in significant increases in business rates liabilities for large distribution warehouses and other major commercial properties.
Understanding how the valuation office agency VOA assesses values, and how these values translate into business rates liabilities, is crucial for all businesses. The upcoming changes highlight the importance of proactive planning and regular review of your property’s rateable value to ensure you are prepared for any significant changes in liability.
- The 2026 rating revaluation takes effect on 1 April 2026, with all commercial properties in England and Wales reassessed based on rental values from 1 April 2024
- A new five-multiplier system replaces the current two-multiplier structure, providing relief for retail, hospitality, and leisure properties under £500,000 rateable value while increasing rates for larger properties
- Industrial properties face the largest increases with rental values up 28.6% since April 2021, while retail values fell 0.5% and offices increased 6.0%
- Draft rateable values will be published in Q4 2025 following the Autumn Budget on November 20th 20025, with formal challenge processes beginning in April 2026
- New duty to notify requirements become effective from 2026 with full implementation by 2029, requiring businesses to report property changes within 60 days
Key Takeaway
The 2026 rating revaluation represents the most significant overhaul of the business rates system in recent years, affecting over 2 million non- domestic properties across England and Wales. This comprehensive transformation introduces fundamental changes to how business rates liabilities are calculated, with new multipliers providing targeted relief for struggling sectors while ensuring the system better reflects current market conditions.
Understanding these changes is crucial for business planning, as the revaluation will redistribute the business rates burden across different property types and sectors. While the government maintains that revaluations don’t raise additional revenue overall, individual businesses may see significant increases or decreases in their liabilities depending on their property type and location.
What Is the 2026 Rating Revaluation?
The 2026 rating revaluation is a comprehensive reassessment of rateable values for all non domestic properties conducted by the valuation office agency (VOA). This mandatory process, which occurs every three years, ensures that business rates liabilities broadly reflect current market conditions by updating property valuations based on rental evidence from a specific date.
The Valuation Office Agency plays a central role in this process, analysing rental values, lease agreements and market trends to determine new rateable values for each property. These valuations are recorded in the official rating list, which is used to manage business property valuations and business rates. The rating list forms the foundation of the business rates system, with billing authorities applying multipliers to calculate individual business rates bills.
Unlike previous revaluations that occurred every five years, the government has committed to three-yearly cycles to ensure valuations remain more current with changing market conditions. This approach provides businesses with greater long-term certainty while reducing the dramatic shifts that can occur when valuations become significantly outdated.
The revaluation process redistributes business rates liabilities rather than raising additional revenue. Properties that have seen rental values rise above the average will generally face higher bills, while those with below-average increases or decreases may see reductions. This redistribution ensures the tax burden aligns with current property market realities.
Key Dates and Timeline for 2026
The business rates revaluation follows a carefully structured timeline designed to provide businesses with adequate notice and preparation time. Understanding these crucial dates enables proactive planning and ensures compliance with new requirements.
April 1, 2024 marks the antecedent valuation date – the fixed point in time when rental values are assessed for the revaluation. All property valuations reflect market conditions as they existed on this specific date, regardless of subsequent market movements.
Q4 2025 will see the publication of draft rateable values by the VOA, giving businesses their first official indication of potential changes. This publication represents a critical milestone, as it allows property owners to review their new valuations and begin preparing challenges if necessary.
The Autumn Budget will announce final details of the new multiplier rates and any transitional relief measures. This announcement provides the missing piece of the puzzle, allowing businesses to calculate their expected bills for April 2026 onwards.
March 31st 2026 is therefore the last day that one can enter an appeal against business rates backdating to April 20024.
April 1, 2026 represents implementation day, when new rateable values and the reformed multiplier system take effect across England and Wales. From this date, businesses will start receiving bills based on the updated valuations and new rate structures.
April 2026 onwards marks the beginning of formal challenge and appeal processes, allowing businesses to contest valuations they believe are incorrect. The VOA provides specific procedures and deadlines for submitting challenges, with businesses having the responsibility to provide supporting evidence for their appeals.
New Multiplier System from 2026
The most significant reform accompanying the 2026 revaluation is the replacement of the current two-multiplier system with five new multipliers. This change, implemented through the Non-Domestic Rating (Multipliers and Private Schools) Act 2025, creates a more nuanced approach to business rates calculation.
Currently, the business rates system uses just two multipliers: the standard multiplier for most properties and the small business multiplier for qualifying small business properties. The new system introduces additional multipliers specifically designed to support retail hospitality and leisure businesses while ensuring larger properties contribute fairly to local government funding.
Under the reformed system, retail, hospitality, and leisure properties with rateable values below £500,000 benefit from two lower multipliers. The exact rates will be confirmed in the autumn budget, but these represent permanent support measures rather than temporary relief schemes. This change provides crucial long term certainty for high street businesses that have faced sustained pressure from changing shopping patterns and economic challenges.
Properties with rateable values over £500,000, primarily large distribution warehouses and major commercial facilities, will face a higher multiplier. This adjustment ensures the overall system remains revenue-neutral while providing targeted support for smaller businesses in vulnerable sectors.
The small business multiplier specifically supports qualifying retail, hospitality, and leisure businesses, creating a pathway for continued high street vitality. These changes represent the government’s commitment to supporting local communities while ensuring the business rates system adapts to modern economic realities.
Rental Value Changes by Sector
The 2026 revaluation reflects substantial changes in rental values across different property sectors, with an overall increase of 10.7% between April 2021 and April 2024. However, these changes vary dramatically by sector, creating winners and losers depending on property type and location.
Industrial properties have experienced the most significant impact, with rental values increasing by 28.6% since the last revaluation. This substantial rise reflects the continued growth in logistics and distribution sectors, driven by e-commerce expansion and supply chain reconfiguration. The increase varies significantly by region, with some areas seeing even more dramatic rises.
Office properties face a 6.0% increase in rental values, though this masks considerable regional variation. London offices in prime locations may see substantial increases, while secondary markets and locations affected by flexible working trends may experience more modest changes or even decreases.
Retail properties provide some positive news for struggling high streets, with rental values declining by 0.5% overall. This decrease reflects the ongoing challenges facing physical retail, from online competition to changing consumer behaviours. Combined with the new lower multipliers for qualifying retail properties, many high street businesses should see reduced business rates liabilities.
Industrial and Logistics Properties
The industrial sector faces the most significant impact from the 2026 revaluation, with the 28.6% increase in rental values creating substantial challenges for occupiers of warehouses, distribution centres and manufacturing facilities. This increase reflects the fundamental shift in how logistics properties are valued by the market.
E-commerce growth has driven unprecedented demand for well-located distribution facilities, particularly those with excellent transport links and last-mile delivery capabilities. Large distribution warehouses near major population centres have seen rental values rise dramatically, with some locations experiencing increases well above the sector average.
Regional variations are particularly pronounced in the industrial sector. Properties in the Midlands and areas around major motorway junctions have seen some of the highest increases, reflecting their strategic importance for national distribution networks. Manufacturing facilities in traditional industrial areas may face more modest increases, though still significant compared to other property types.
The impact on business rates liabilities will be substantial for many industrial occupiers. Even with potential transitional relief measures, businesses should expect significant increases in their annual rates bills. This makes proactive planning essential, including reviewing current lease arrangements and considering the timing of any property decisions.
Retail, Hospitality, and Leisure (RHL) Sector
The retail, hospitality, and leisure sectors benefit from both reduced rental values and the new multiplier system, creating a more supportive environment for businesses that have faced sustained challenges. The 0.5% decrease in retail rental values provides some relief, though the extent varies considerably by location and property type.
High street retail properties in traditional town centres have generally seen rental value decreases, reflecting reduced demand and changing shopping patterns. However, retail parks and out-of-town locations may have experienced more modest decreases or even increases, depending on their specific market dynamics.
The new lower multipliers for RHL businesses represent the most significant long-term benefit. Properties with rateable values below £500,000 will qualify for reduced multipliers, providing permanent support rather than temporary relief schemes. This change offers crucial long-term certainty for business planning and investment decisions.
Hospitality properties, including hotels, restaurants, and leisure facilities, face varied impacts depending on their location and market position. City centre hotels may see rental value increases reflecting strong demand, while rural or struggling locations might experience decreases. The new multiplier system helps offset some of these increases for qualifying properties.
Office and Flexible Workspace Properties
Office properties face a complex landscape in the 2026 revaluation, with a 6.0% overall increase in rental values masking significant variations by location, quality, and type. The pandemic’s impact on working patterns continues to influence office valuations, creating divergent trends across the market.
Prime office locations in central London and other major cities have generally maintained strong rental values, supported by demand for high-quality, well-located space. These properties may see substantial increases in rateable values, translating to higher business rates bills for occupiers.
Secondary office locations and older buildings face more varied outcomes. Properties in areas where demand has weakened may see modest increases or even decreases in rateable values. The shift toward flexible working has particularly impacted these markets, with some experiencing sustained rental pressure.
Flexible workspace providers face particular challenges from the revaluation. Many operate from properties that were previously valued as traditional offices but now command different rental levels due to their specific use. The co-working and serviced office sectors must carefully review their draft valuations to ensure they accurately reflect current market conditions.
Sector Analysis
The education sector confronts significant changes, particularly affecting private schools, nurseries, and educational trusts. Private schools face removal of business rates relief in many cases, substantially increasing their operational costs. Educational properties must carefully review their rateable values and consider the impact of legislative changes on their financial planning.
Infrastructure properties, including telecommunications, transport, and utility facilities, face complex valuation challenges. These specialized properties often lack direct rental comparisons, requiring alternative valuation approaches that may produce unexpected results. The increasing value of digital infrastructure, in particular, may lead to substantial rateable value increases.
The renewables and energy sector encounters evolving valuation approaches as the market for clean energy infrastructure matures. Solar farms, wind turbines, and battery storage facilities represent relatively new asset classes with developing valuation methodologies. Operators should expect potential volatility in their rateable values as the rating system adapts to these technologies.
The increasing value of digital infrastructure, in particular, may lead to substantial rateable value increases.
Legislative Changes and New Requirements
The 2026 revaluation introduces significant legislative changes that extend beyond simple valuation updates. The Non-Domestic Rating Act 2023 implements several important reforms designed to modernize the business rates system and improve transparency for ratepayers.
The most significant change is the introduction of duty to notify requirements, which fundamentally alter how businesses must interact with the valuation office agency. From April 2026, businesses have a legal duty to notify the VOA of material changes to their properties within 60 days of the change occurring.
This duty to notify covers various scenarios, including alterations to property size or layout, changes in use, completion of new buildings, and modifications that might affect rateable value. The requirement represents a shift from the previous system where businesses could remain passive participants in the rating process.
The legislation also introduces enhanced transparency measures, giving businesses greater access to information about how their properties are valued. This includes access to details about comparable properties used in valuations and clearer explanations of valuation methodologies.
Phased implementation means the new requirements begin with pilot schemes from April 2026, with full rollout expected by April 2029. This staged approach allows businesses to adapt to the new obligations while enabling the VOA to refine its systems and processes.
Business Rates Advice and Support
Navigating the complexities of the business rates system can be challenging, especially with the upcoming 2026 revaluation and the introduction of new legislative requirements. Seeking professional business rates advice is essential for ensuring your company understands its liabilities, identifies opportunities for relief, and remains compliant with the latest regulations.
Expert advisors, such as Vickery Holman’s team of Chartered surveyors and specialist rating consultants, can provide tailored guidance on reviewing your rateable values, preparing for the new multiplier system, and managing appeals or challenges with the valuation office agency. These professionals have in-depth knowledge of market trends, sector-specific valuation issues, and the administrative processes involved in the business rates system.
In addition to professional advisors, the VOA and local billing authorities offer resources and support for ratepayers. The VOA’s website provides detailed information on how rateable values are determined, the appeals process, and the new duty to notify requirements. Local authorities can assist with questions about your business rates bill, available reliefs, and payment options.
For businesses operating across multiple sectors or with complex property portfolios, engaging with a trusted advisor can help you develop a comprehensive strategy for managing business rates liabilities. The Rating Consultancy team at Vickery Holman provide proactive planning and regular portfolio reviews. and suggest that staying informed about legislative changes is key to minimizing costs and ensuring compliance.
Preparing for the 2026 Revaluation
Effective preparation for the 2026 revaluation requires a systematic approach that begins well before the draft rateable values are published. Revaluation 2026 is a significant event that demands proactive planning and early action from all affected businesses. Businesses that start planning early can better manage the impact of changes and identify opportunities for relief or challenge.
Gathering supporting evidence represents a crucial preparation activity. This includes collecting rental agreements, lease details, market evidence, and any factors that might affect property valuation. Having this information readily available enables quick response to draft valuations and supports any subsequent challenge processes, and Rating Consultants will help with this process.
Developing a comprehensive business rates strategy should consider both immediate revaluation impacts and longer-term planning. This includes budgeting for potential increases, identifying relief opportunities, and establishing ongoing monitoring systems for future compliance requirements.
Understanding the formal challenge process and its deadlines ensures businesses can respond effectively if they disagree with their draft valuations. The VOA provides specific procedures for challenges, and early preparation improves the chances of successful outcomes.
Immediate Actions for Businesses
Several immediate actions can help businesses prepare effectively for the upcoming changes. These steps should be initiated well before the draft values are published to ensure adequate preparation time.
Conducting property portfolio reviews should begin immediately, focusing on properties most likely to be affected by rental value changes. Industrial properties, in particular, warrant detailed analysis given the sector’s substantial rental value increases. This review should identify potential challenges and opportunities across your portfolio.
Establishing relationships with professional advisors provides access to specialised expertise in business rates matters. Professional advisors can offer business rates advice on complex situations and provide ongoing support throughout the revaluation process. Their expertise becomes particularly valuable for challenging valuations or navigating the new duty to notify requirements.
Implementing systems for monitoring market trends and rental values enables ongoing assessment of your property portfolio’s position. Understanding local market conditions helps predict potential impacts and identify properties requiring detailed analysis.
Creating compliance frameworks for the new duty to notify requirements ensures your business can meet its legal obligations from Aprill 2026. This includes establishing procedures for identifying material changes and ensuring timely notification to the valuation office agency.
Long-term Strategic Planning
Long-term planning for the 2026 revaluation and beyond requires consideration of the changing business rates landscape and its implications for property strategy. The move to three-yearly revaluations means businesses need systems for ongoing monitoring and adaptation.
Developing business rates budgets that incorporate revaluation impacts helps manage cash flow and financial planning. These budgets should consider both immediate changes from the 2026 revaluation and potential future adjustments under the new three-yearly cycle.
Establishing ongoing relationships with billing authorities can provide valuable insights into local rating issues and opportunities for discussion about property assessments. These relationships become particularly important for properties with unique characteristics or circumstances.
Planning for future revaluations under the new three-year cycle requires systems for continuous monitoring rather than periodic review. Businesses should establish processes for tracking market changes, property modifications, and other factors affecting rateable values on an ongoing basis.
Creating robust appeal and challenge capabilities ensures businesses can respond effectively to future valuations they consider incorrect. This includes maintaining detailed records of property changes, market evidence, and professional relationships necessary for successful challenges.
Conclusion and Final Thoughts
The 2026 rating revaluation marks a pivotal moment for the business rates system in England and Wales, introducing a new multiplier structure, updated rateable values, and enhanced compliance requirements. These changes will have a significant impact on businesses across all sectors, from small high street retailers to large distribution warehouses and specialist properties.
Proactive planning, regular review of your rateable values, and a clear understanding of your business rates liabilities are more important than ever. By seeking expert business rates advice, staying informed about legislative changes, and engaging with the Valuation Office Agency and local authorities, you can navigate the complexities of the revaluation process and position your business for long-term success.
If you have questions about your rateable value, need support with the new duty to notify requirements, or want to explore strategies for managing your business rates liabilities, don’t hesitate to contact Vickery Holman Property Consultants. Taking action now will ensure your business is ready for the changes ahead and can take full advantage of the opportunities presented by the 2026 revaluation.
