Business rates for restaurants: kitchens, floor areas and reliefs

How does the VOA value a restaurant for business rates?

Most restaurants are valued by rental comparison: the VOA studies rents paid for your restaurant and similar ones nearby, turns them into a price per square metre and applies that price to the floor area of each part of the building. Your turnover and the number of covers are not the starting point.

The rateable value is meant to be the yearly rent your restaurant could have let for on the open market at 1 April 2024, on standard assumptions. For most sit-down restaurants, cafes and snack bars the VOA gets there from rents, using the net internal area (NIA) and grouping similar restaurants into local valuation schemes. Roadside, drive-to and drive-through restaurants have their own guidance and are not covered here.

So a restaurant that seats 60 and one that seats 90 in identical units should, in principle, have similar values: what counts is the space and how it is laid out, not how hard you pack the tables or how busy Saturday night is. That is the main difference from pubs, which are valued on trade.

Where trade can come into it

The VOA's rating manual says its pub valuation guide is not used for restaurants in general. But where a licensed restaurant shares many features of a pub or pub restaurant, a trade-based valuation may be used instead of floor area. A remote rural restaurant with no comparable rents might also be valued using its receipts. If your restaurant has been valued on trade rather than floor area, it is worth understanding why.

Is a restaurant zoned like a shop, or valued overall?

It depends on the local rental evidence. Restaurant rents increasingly support an overall approach, where every part of the building is related back to the main dining space. Zoning, as used for shops, may still apply where a restaurant trades from a largely unaltered shop unit in a core retail street and rents match nearby shops.

The VOA's rating manual explains that restaurant values often don't move in step with the Zone A prices of shops around them. A street with a strong evening or tourist trade may command higher restaurant rents than its shop rents would suggest. In a prime shopping centre the reverse can happen: landlords may accept lower rents from restaurants to get a mix of tenants, and trading hours may be limited by the centre's opening times.

The manual points towards the overall method where:

• the restaurant is away from the core retail pitch, or the area is mainly evening or leisure trade;
• a large kitchen has been created or other significant alterations made;
• there is a large rear dining area, or customer toilets and rear parts have been improved for diners.

Zoning is more likely in peak Zone A streets and prime shopping centre positions, where a restaurant is competing for the same units as shops. Our guide to business rates for shops explains how zoning works.

How are kitchens, stores and toilets valued in a restaurant?

Under the overall method the ground floor dining area is taken at 100%. The VOA's 2026 practice note says a kitchen, prep or servery area behind a structural wall is usually taken at 70%, and ground floor stores and customer toilets at 50%. An open or show kitchen, or one divided from the dining room only by a stud partition, is taken at 100%.

The VOA records each part of the restaurant separately: dining area, servery, bar, kitchen, stores, offices, cold stores and upper level stores. Each is then given a percentage of the main price. The weighted total is called the area "in terms of main space".

These are the VOA's standard relativities for restaurants valued overall outside central London; central London uses a different scale, and upper and lower floors are taken at lower percentages.

An illustration of why the kitchen wall matters

Take a restaurant with 120 m² of dining space, a 40 m² kitchen, 15 m² of stores and 10 m² of customer toilets, and a made-up local price of £250 per m²:

A simplified example: real valuations may include other items such as plant. But it shows why it is worth checking how your kitchen's wall has been described, and whether a store has been recorded as kitchen or a kitchen as dining space.

The VOA's practice note also says particularly high or low quality of fit-out is not normally treated as affecting a restaurant's value, so a smart refurbishment is not, on its own, a reason for a higher figure, and a tired interior is not a reason for a lower one.

Do you pay business rates on a restaurant's outside seating?

A defined outside seating area that forms part of your property can be valued, usually at one eighth of the main price per square metre. Tables on the public pavement are not generally part of the property for rates. Enclosed terraces with a solid roof are valued at more.

The VOA's guidance lists outside seating as one of the features it considers, and its practice note asks valuers to record all of it. In summary:

• A defined terrace, courtyard or forecourt within your property: valued at one eighth of the main rate. A 40 m² terrace at £250 per m² would add about 40 × 1/8 × £250 = £1,250 to the rateable value in our illustration.
• A covered area with a substantial roof (not fabric) gets an extra amount on top. Permanent, enclosed structures used all year may be counted as part of the restaurant itself.
• Pavement tables on the highway are not generally part of the property. The VOA also considers whether a forecourt is included in your rent or is highway you pay the council separately to use.

Things to check: is the area measured correctly; is a pavement area being treated as yours; has a seasonal, fabric-covered area been treated like a permanent extension; and if a terrace or enclosure has been removed, has the VOA been told?

How are upper floor, basement and surplus spaces valued?

Space above or below the ground floor is normally valued at a lower percentage, and a restaurant trading mainly from an upper floor or basement is usually worth less than a similar ground floor one. Upper floors that are hard to reach or serve from the kitchen may be discounted further, but high-level restaurants with views can be worth more.

Points from the VOA's rating manual that often matter for restaurants in older buildings:

• Mezzanines: valuers are told generally to record a mezzanine as a first floor (70% of the main rate by default), and only use the lower mezzanine rate (50%) for platforms, for example where headroom is limited. If your mezzanine is low, cramped or awkward, say so with photos.
• Surplus space: in historic or converted buildings an operator may take several floors to get the ground floor it wants. Upper floors that are hard to reach and hard to serve from the kitchen may justify a discount, and in rare cases a nil value for space the market would not want.
• Basement and upper-floor restaurants: generally lower value than ground floor ones nearby. The visibility, width and ease of access of the entrance matter.
• Living accommodation: the VOA adjusts rents that include living space before comparing them with other restaurants, so make clear if the rent you report covers a flat.

My restaurant is in a former shop or bank. Does that change the valuation?

Yes. When a converted shop is valued on the overall basis as a restaurant, the VOA removes the allowances shops sometimes get for awkward shape, pillars, masked areas, double units or a hard bank frontage, because restaurant operators often don't see those features as drawbacks.

An old bank with a solid frontage, or an irregular unit with columns, might be marked down as a shop. Restaurant operators often like those buildings for their character, so the VOA's practice note says these retail allowances should be taken out when a converted property is valued overall as a restaurant. Size allowances (for very large units) should only be made if restaurant rents support them.

So if your rateable value went up after a change of use from shop to restaurant, losing a shop allowance may be part of the reason, not necessarily an error. What is still worth checking is whether the right method was chosen, whether the price per square metre matches other restaurants nearby, and whether the areas and kitchen are recorded properly.

Some units keep a retail area at the front with a restaurant behind, sometimes because of planning conditions. The VOA treats these case by case (overall, zoned or a mix), so check which approach has been used.

Why does the VOA want my restaurant's rent and lease details?

Restaurant values are built from rents, so the rent you pay, and rents for similar restaurants nearby, are the main evidence. The VOA adjusts rents for things like whether you took a bare shell or a fitted unit, rent-free periods and living accommodation before comparing them.

The VOA may ask you for rent and lease details, and if you challenge you must give them, including any rent-free period. Details that can change how a rent is read:

• Shell or fitted: many restaurants are let as bare shells and the tenant pays for air conditioning, customer toilets and a commercial kitchen. The VOA adds back the tenant's rateable fit-out, so a low shell rent does not on its own mean a low rateable value.
• Incentives: the VOA's 2026 practice note says larger restaurant units may have needed rent-free periods of typically 12 to 18 months, and sometimes capital contributions, to let. Tell the VOA about any you had.
• Additions: above-normal car parking, air conditioning and outside seating can all be added when comparing rents.
• Licensing: evidence may show unlicensed cafes and tearooms at lower values than licensed restaurants or fast food outlets.

The same practice note says that at the 2024 valuation date restaurant rents were starting to recover in some areas but were still below pre-pandemic levels, with stronger recovery in prime and traditional restaurant areas than in secondary ones. If your restaurant is in a secondary location, it may be worth comparing your price per square metre with prime streets nearby.

What multiplier and reliefs apply to a restaurant?

In England, an occupied restaurant open to the public pays the lower retail, hospitality and leisure multipliers in 2026/27: 38.2p under £51,000 rateable value and 43p from £51,000 to £499,999. Pubs relief does not apply to restaurants. Small business rate relief, transitional relief and supporting small business relief may help. In Wales, restaurants can get 15% Food and Drink Hospitality Rates Relief.

England, 2026/27

• RHL multipliers: restaurants qualify because they sell food or drink to visiting members of the public. 38.2p for a rateable value under £51,000; 43p from £51,000 to £499,999; 50.8p for £500,000 or more. An empty restaurant does not get the RHL multipliers.
• No pubs relief: council guidance says restaurants are not pubs for pubs and live music venues relief. A restaurant that genuinely operates as a pub is a matter for the council.
• Small business rate relief: nothing to pay at a rateable value of £12,000 or less, tapering to no relief at £15,000, usually for one property only.
• Transitional and supporting small business relief: limit how fast the bill rises after the 2026 revaluation. Supporting small business relief is for those whose bill rose at the revaluation and who lost some or all of a relief such as the 40% retail, hospitality and leisure relief that applied in 2025/26.

Worked examples, England 2026/27

Simplified illustrations: transitional relief or supporting small business relief could lower these. You can try your own figures in our business rates calculator.

Changes announced for 2027/28

Announced at the Budget on 28 October 2026, due from 1 April 2027 and subject to regulations: the RHL multipliers become 39.5p and 44.5p; bills for qualifying hospitality properties are to be capped by inflation in 2027/28 and 2028/29 (not covering increases from improvements or loss of other reliefs, and not for properties empty on 1 April); and small business rate relief for qualifying hospitality properties extends to £18,000, tapering to £21,000. Before any cap, the £43,000 restaurant above would be £43,000 × 0.395 = £16,985.

Wales, 2026/27

• Multiplier: the Welsh retail multiplier (0.350) is for shop descriptions only, not restaurants. Restaurants pay the standard multiplier of 0.502, or 0.515 if the rateable value is above £100,000. The Welsh Government says the lower multiplier is due to extend to selected food and drink descriptions from 1 April 2027.
• Food and Drink Hospitality Rates Relief: 15% off for occupied restaurants, cafes, pubs and bars, capped at £110,000 per business across Wales. You apply to the council, by 31 March 2027 for this year.
• Small business rates relief: full relief up to £6,000 rateable value, tapering to nothing at £12,000.

Example: a Welsh restaurant with a rateable value of £43,000: £43,000 × 0.502 = £21,586, less 15% hospitality relief (£3,237.90) = £18,348.10 before other reliefs. In Wales you must also tell the council within 60 days when you become the ratepayer or the property becomes occupied or empty, or face a £500 penalty.

What should I check on my restaurant's valuation?

Check the method (overall or zoned), the price per square metre against similar restaurants nearby, how the kitchen and its wall are described, the areas of stores, toilets and upper floors, how outside seating is treated, and whether plant such as air conditioning is shown correctly.

Add the restaurant to your business rates valuation account, open the valuation details and work through this list:

1. Method: overall or zoned, and is that consistent with other restaurants on your street?
2. Price per square metre: compare it with similar restaurants using the "Find a business rates valuation" service.
3. Kitchen: is it separated from the dining area by a structural wall or just a partition, and is it open to view?
4. Use of each area: stores, staff areas and offices recorded as dining or kitchen space would be weighted too high.
5. Toilets: customer toilets are included at a reduced rate; staff-only toilets should not be.
6. Upper floors and mezzanines: correct floor level, and any surplus or hard-to-use space described.
7. Outside seating: correct area, and is it actually part of your property rather than the pavement?
8. Plant: air conditioning, heating, sprinklers or lifts shown separately should match what is installed.

If anything has changed since the valuation, such as a terrace removed or an extension added, report it through a check. Councils also need to know about changes such as the property becoming empty, or you may get a backdated bill.

When might it be worth challenging a restaurant's rateable value?

A challenge may be worth considering if the wrong method has been used, your price per square metre is out of line with comparable restaurants, kitchen or storage areas are weighted too highly, pavement seating has been included, or something outside your control, like long-term roadworks, is affecting the restaurant. You can do it free yourself or use a rating surveyor.

The route is Check, then Challenge, then Appeal to the Valuation Tribunal for England or for Wales. You raise a check to confirm or correct the facts, then usually have four months from the check decision to challenge, with your reasons, evidence, a statement, the rateable value you think is right and your rent details. All the evidence must go in together; later evidence is only accepted in exceptional cases. The value can go down, up or stay the same, and you keep paying while it is looked at. Our step-by-step guide to challenging business rates covers the time limits.

For a restaurant, the strongest evidence is usually a measured plan showing each area and its use, photos of the kitchen and walls, your lease and any incentives, and rents or valuations for comparable restaurants (not just shops) nearby.

You can do all of this yourself, free, through your valuation account. Reasons some restaurant owners use a rating surveyor instead:

• Time: service hours leave little room for paperwork.
• Method: arguing overall versus zoned needs local rental evidence.
• Measurement: they can survey and draw up a plan that matches the VOA's approach.
• Deadlines: they keep track of the time limits.

No challenge is guaranteed to succeed, and any fees are agreed directly with the surveyor before they start.

Related guides

Business rates for restaurants: frequently asked questions

Sources

We checked the facts on this page against these official sources on 11 November 2026:

• How restaurants are valued for business rates
• Rating Manual section 6 part 3: Restaurants
• Estimate your business rates
• Business rates relief
• Non-domestic rates: Food and Drink Hospitality Rates Relief 2026-27
• Challenge the valuation

This guide is general information for properties in England and Wales, not advice. Business Rates Hub is an independent guide. We are not your council, the Valuation Office Agency (VOA) or any government service. You can check and challenge your rateable value yourself, free of charge, through the government's business rates valuation account.

Back to the top ↑