Small business rate relief: key facts
- In England in 2026/27, a business using one property with a rateable value of £12,000 or less pays no business rates under small business rate relief.
- Between £12,001 and £15,000 the relief tapers: the share of the bill taken off is (£15,000 minus the rateable value) ÷ £3,000, so £13,500 gets 50% off and £14,000 gets 33% off.
- If you take on a second property in England on or after 27 November 2025, you keep relief on your main property for 36 months (12 months if before that date).
- After that, relief continues only if no other property has a rateable value above £2,899 and the total of all your properties is under £20,000 (£28,000 in London).
- Small business rate relief is for occupied properties only, and you can't get it at the same time as charitable rate relief.
- Announced at the Budget on 28 October 2026, due from 1 April 2027: full relief for qualifying retail, hospitality and leisure properties up to £18,000, tapering to £21,000; a single £29,999 total for multiple properties; and no relief for vape shops.
- In Wales, relief is 100% up to £6,000 and tapers to nothing at £12,000, for up to two properties per business in each council area.
How much small business rate relief do you get in England?
In England in 2026/27, a business using one property gets 100% relief if the rateable value is £12,000 or less. From £12,001 to £15,000 the relief falls in a straight line, by one third of a percentage point for every £10 of rateable value, reaching nothing at £15,000.
Two conditions decide whether you qualify at all: the property's rateable value is under £15,000, and your business uses only one property (with the exceptions in the second-property section below). The relief is always worked out from the rateable value of the property being billed.
In the regulations, the taper works by dividing the bill by a figure based on how far the rateable value is above £12,000. In plain terms, the share of the bill you don't pay is:
| Rateable value (England, one property) | Relief | Share of the bill you pay |
|---|---|---|
| £12,000 or less | 100% | Nothing |
| £12,500 | About 83% | About one sixth |
| £13,000 | About 67% | One third |
| £13,500 | 50% | Half |
| £14,000 | About 33% | Two thirds |
| £14,500 | About 17% | Five sixths |
| £15,000 or more | None | All of it |
The £13,500 and £14,000 rows match the examples GOV.UK gives. Because the relief and the starting bill both depend on the rateable value, the bill climbs steeply through the taper, which is why a small change in rateable value matters so much in this band (see the worked examples).
Above £15,000 there's no small business rate relief, but a property with a rateable value under £51,000 still uses the lower small business multiplier (43.2p, or 38.2p for qualifying retail, hospitality and leisure properties in 2026/27). Our guide to business rates multipliers explains which applies.
What does the taper mean for an actual 2026/27 bill?
For a qualifying shop in England in 2026/27, a rateable value of £13,000 gives a bill of about £1,699, while £14,500 gives about £4,737, assuming the 1p transitional relief supplement applies. Around the middle of the taper, each extra £1,000 of rateable value adds about £1,960 to a shop's bill.
These examples are for a business using one property in England that was in the rating list on 31 March 2026 and isn't getting transitional relief or supporting small business relief. That means it pays the 1p transitional relief supplement, which is added to the multiplier before the relief is taken off. They're illustrations only.
| Property and rateable value | Before relief | Relief | 2026/27 bill |
|---|---|---|---|
| Shop, £12,000 | £12,000 × 0.392 = £4,704 | 100% | £0 |
| Shop, £13,000 | £13,000 × 0.392 = £5,096 | About 67% | about £1,699 |
| Shop, £14,500 | £14,500 × 0.392 = £5,684 | About 17% | about £4,737 |
| Shop, £15,000 | £15,000 × 0.392 = £5,880 | None | £5,880 |
| Office or workshop, £13,000 | £13,000 × 0.442 = £5,746 | About 67% | about £1,915 |
The 0.392 figure is the 38.2p small business retail, hospitality and leisure multiplier plus the 1p supplement; 0.442 is the 43.2p small business multiplier plus 1p. An office, workshop, accountant's or dentist's premises isn't a qualifying retail, hospitality or leisure property, so it starts from the higher figure.
Why the taper makes every pound of rateable value count
Going from £13,000 to £14,000 for the shop raises the bill from about £1,699 to about £3,659: roughly £1,960 for £1,000 of rateable value. A business at £12,000 pays nothing, but one at £15,000 pays the whole £5,880. So if your rateable value sits in the £12,001 to £15,000 band, it may be worth checking that the floor area and other details behind it are right.
Try your own figures in our business rates calculator, or see how business rates are calculated for the full order of steps.
Can you keep small business rate relief with a second property?
Yes, for a while and sometimes for good. In England you keep relief on your main property for 36 months after taking on a second property on or after 27 November 2025 (12 months if before). After that you keep it only if no other property has a rateable value above £2,899 and the total of all your properties is under £20,000, or £28,000 in London.
This is where small businesses most often lose relief without realising it. There are two separate rules.
1. The grace period
When you take on another property, relief on your main property carries on for a fixed time:
- 12 months if you got the second property before 27 November 2025
- 36 months if you got it on or after 27 November 2025
2. The small-other-properties test
Once the grace period ends, you can still get relief on your main property if both of these apply:
- none of your other properties has a rateable value above £2,899
- the total rateable value of all your properties, including the main one, is under £20,000, or under £28,000 if your main property is in London
| Example (England, after any grace period) | Other property test | Total test | Relief on main property? |
|---|---|---|---|
| Cafe £10,000 plus a lock-up store £2,400 | Passes (£2,400) | Passes (£12,400) | Yes |
| Shop £11,000 plus a second shop £8,000 | Fails (£8,000 is above £2,899) | Passes (£19,000) | No, once the grace period ends |
| Workshop £14,500 plus two stores at £2,800 each, outside London | Passes | Fails (£20,100) | No |
| The same three properties, main one in London | Passes | Passes (under £28,000) | Yes |
Things that count as another property
A "property" here means a separate entry in the rating list, not a separate building. Parts of a building separated by another occupier or by shared stairs, lifts or corridors get separate rateable values, and parking separated by a shared area can be valued on its own. So renting an extra room down the corridor, or a parking space with its own rateable value, may count. Your business rates for small businesses guide covers how to find out how your premises are split.
Who can't get small business rate relief?
In England you can't get small business rate relief on an empty property, at the same time as charitable rate relief, or on a property with a rateable value of £15,000 or more. From 1 April 2027, as announced at the Budget on 28 October 2026, vape shops are also due to lose it.
- Empty properties. Small business rate relief sits in the part of the law that charges occupied property, so it only applies while you occupy the premises. An empty property falls under empty property rules instead: in England, three months free after it becomes empty, and a property with a rateable value under £2,900 pays no empty rates until it's reoccupied.
- Charities and community amateur sports clubs. You can't have small business rate relief and charitable rate relief together. GOV.UK says the council decides which you're eligible for. Charitable relief is up to 80% off, and the council can top it up.
- Too many or too valuable other properties. See the second-property rules above.
- Vape shops, from April 2027. Announced at the Budget on 28 October 2026, due from 1 April 2027 subject to regulations: vape shops lose small business rate relief and the lower retail, hospitality and leisure multipliers.
What you still get without the relief
Missing out on small business rate relief doesn't put you on the full rate. In England, any property with a rateable value under £51,000 is billed on the small business multiplier: 43.2p in 2026/27, or 38.2p for a qualifying retail, hospitality or leisure property. That's true even if you have several properties or your rateable value is above £15,000. Other reliefs may also apply, such as transitional relief, rural rate relief for a village's only shop, post office, pub or petrol station, or hardship relief at the council's discretion.
What if you lost small business rate relief at the 2026 revaluation?
If your rateable value rose on 1 April 2026 and you lost some or all of your small business rate relief, supporting small business relief may limit the increase in your 2026/27 bill to £800 or a percentage cap, whichever is greater. For a rateable value up to £20,000 (£28,000 in London) the cap is 5%.
Rateable values changed across England and Wales on 1 April 2026 (see our 2026 revaluation guide). A small business that was fully relieved at, say, £11,500 may now be at £13,500 and part-way down the taper, or above £15,000 with no relief at all.
In England, supporting small business relief is aimed at exactly this. For 2026/27, your bill can't rise by more than the greater of £800 or a percentage of your 2025/26 bill after reliefs:
| 2026 rateable value | Percentage cap |
|---|---|
| Up to £20,000 (£28,000 in London) | 5% |
| £20,001 to £100,000 (£28,001 and over in London) | 15% |
| Over £100,000 | 30% |
Illustration: a shop paid nothing in 2025/26 because it had full small business rate relief. Its new rateable value is £13,500, so its 2026/27 bill would otherwise be £13,500 × 0.382 = £5,157, halved by the taper to about £2,579. 5% of a £0 bill is £0, so the £800 figure applies and the bill would be capped at about £800. A property getting supporting small business relief doesn't pay the 1p supplement.
The same relief also covers businesses that lost rural rate relief or retail, hospitality and leisure relief at the revaluation. If you think you qualify and it isn't on your bill, contact the council.
What changes to small business rate relief from April 2027?
Announced at the Budget on 28 October 2026, due from 1 April 2027: qualifying retail, hospitality and leisure properties in England get full relief up to £18,000, tapering to £21,000; the total-value test for extra properties becomes a single £29,999; and vape shops lose the relief. Regulations are still to follow.
| England | 2026/27 | From 1 April 2027 (announced) |
|---|---|---|
| Full relief, qualifying retail, hospitality and leisure property | £12,000 or less | £18,000 or less, tapering to £21,000 |
| Full relief, other properties (offices, workshops and so on) | £12,000 or less | No change announced |
| Total rateable value test for second and further properties | Under £20,000 (£28,000 in London) | A single £29,999 for all of England |
| Vape shops | Can qualify | Lose small business rate relief |
| Small business multiplier / retail, hospitality and leisure version | 43.2p / 38.2p | 44.7p / 39.5p |
The higher £18,000 and £21,000 thresholds and the single £29,999 total are due to run until 31 March 2029. Whether you count as "retail, hospitality or leisure" uses the same legal definition as the lower multipliers: broadly, premises used wholly or mainly to sell goods or services to visiting members of the public, food and drink, holiday accommodation, or leisure and cultural activities. Financial, medical and professional services such as accountants, dentists and estate agents are excluded.
How do you apply for small business rate relief?
In England, GOV.UK tells you to contact your local council to check you're eligible and find out how to get small business rate relief. In Wales, councils apply it automatically to eligible bills. In both, contact the council if you think you should be getting it and aren't.
Small business rate relief is given by the council that sends your bill, not by the Valuation Office. Some councils have an online form; others apply it once they know you qualify.
- Check your rateable value on GOV.UK's "Find a business rates valuation" service or in your business rates valuation account.
- List every property your business occupies in England, with each rateable value, including stores, parking and extra rooms that are separately valued.
- Contact the council for the property and ask how to claim, and whether other reliefs can be given on top.
- Check the bill when it arrives: the relief should be shown as a separate line, and the multiplier should be the small business one.
- Report changes to the council: taking on another property, the property becoming empty, works that increase its value, or a change in what your business does or where it operates.
Your relief can go down as well as up. GOV.UK gives the example of the rateable value increasing, and you'll usually pay the new amount from the day your circumstances changed.
How does small business rates relief work in Wales?
In Wales, small business rates relief is 100% for a rateable value up to £6,000 and tapers to nothing at £12,000. It covers up to two properties per business in each council area, the property must be occupied, and councils apply it automatically. Registered childcare providers get 100% and post offices get extra help.
Wales's scheme is funded by the Welsh Government and works differently from England's in four main ways: lower thresholds, a two-property limit instead of a total-value test, extra help for some uses, and different multipliers. Business Wales's illustration for 2026/27:
| Rateable value | Relief | Bill after relief, standard multiplier (50.2p) | Bill after relief, retail multiplier (35p) |
|---|---|---|---|
| £6,000 or less | 100% | £0 | £0 |
| £7,000 | 83% | £586 | £408 |
| £8,000 | 67% | £1,339 | £933 |
| £9,000 | 50% | £2,259 | £1,575 |
| £10,000 | 33% | £3,347 | £2,333 |
| £11,000 | 17% | £4,602 | £3,208 |
| £12,000 | 0% | £6,024 | £4,200 |
- Two properties per business in each council area. It's up to the ratepayer to tell the council if this limit applies; the council then changes the bill.
- Registered childcare premises get 100% relief, and aren't affected by the two-property limit. Our day nurseries guide has more.
- Post offices get 100% relief up to £9,000 and 50% from £9,001 to £12,000, and aren't affected by the two-property limit either.
- Not eligible: empty properties, charities (which can get charitable relief instead), beach huts, properties occupied by a council, police and crime commissioner or the Crown, and properties used only for advertising, car parking, sewage works or telecoms equipment.
The 35p retail multiplier in Wales applies only to properties under £51,000 with certain descriptions in the rating list, such as "shop and premises", so a cafe or salon at the same rateable value pays more. Wales has no 1p supplement. If you think your relief has been worked out wrongly, Business Wales says to contact the council.
Could a lower rateable value get you more small business rate relief?
It may, if your rateable value is between £12,001 and £15,000 in England (£6,001 to £12,000 in Wales), or just above the top of the band. A lower rateable value there both reduces the starting bill and increases the relief. If you already pay nothing, a lower value won't change your current bill.
Small business rate relief makes the value of a challenge very uneven. The same £1,000 reduction in rateable value could be worth nothing, a few hundred pounds, or around £2,000 a year, depending on where you start:
- At or below £12,000 (England): you already pay nothing on your only property, so a reduction won't change today's bill. It could matter later, for example under the £20,000 total test if you take on another property.
- In the taper: this is where a correct reduction makes the most difference per pound.
- Just above £15,000: a reduction to £15,000 or less would bring some relief back.
- A second property just above £2,899: whether that value is right could decide whether you keep relief on your main property once the grace period ends.
A reduction needs a real reason: the wrong floor area, the wrong description, features you don't have, parts that should be valued separately or together, or a valuation out of line with similar properties nearby. You can check and challenge your rateable value yourself, free, through your business rates valuation account: a check first, then a challenge within four months of the check decision. The rateable value can go down, stay the same or go up. Our guide on how to challenge business rates sets out the steps.
A rating surveyor can do it for you. On a small bill, make sure any fee is agreed in writing first and is in proportion to what might be saved.
Related guides
Small business rate relief: frequently asked questions
What is small business rate relief?
It is a reduction in business rates for small properties. In England in 2026/27, a business using one property with a rateable value of £12,000 or less pays nothing, and the relief tapers away between £12,001 and £15,000. Wales has its own scheme with lower thresholds.
How is the small business rate relief taper worked out?
In England, for a rateable value between £12,001 and £15,000, the share of the bill taken off is roughly (£15,000 minus the rateable value) divided by £3,000. So £13,000 gets about two thirds off, £13,500 gets half off and £14,000 gets about a third off.
Do I need to apply for small business rate relief?
In England, GOV.UK tells you to contact your local council to check you're eligible and how to get it. In Wales, councils apply it automatically to eligible bills. Either way, contact the council if you think you qualify and it isn't on your bill.
Can I get small business rate relief on two properties?
In England the relief is on your main property only. You keep it for 36 months after taking on a second property on or after 27 November 2025 (12 months before then), and after that only if no other property is above £2,899 and the total is under £20,000, or £28,000 in London. In Wales up to two properties per business in each council area can get it.
Does a separately valued parking space or store count as a second property?
It can. Small business rate relief looks at entries in the rating list, and parking or rooms separated from your main premises by a shared area or another occupier can have their own rateable value. If it is £2,899 or less and your total stays under the limit, you can usually keep relief on your main property.
Can I get small business rate relief on an empty property?
No. It only applies to occupied property in both England and Wales. Empty properties have their own rules, such as three months free after becoming empty in England, and no empty rates on properties with a rateable value under £2,900.
Can a charity get small business rate relief?
In England you can't get small business rate relief and charitable rate relief at the same time, and the council decides which applies. In Wales, charities aren't eligible for small business rates relief but may get charitable relief.
I lost small business rate relief at the 2026 revaluation. Is there any help?
In England you may get supporting small business relief, which limits the increase in your 2026/27 bill to £800 or a percentage of your 2025/26 bill, whichever is greater. For rateable values up to £20,000 (£28,000 in London) the percentage is 5%. Contact your council if it isn't on your bill.
What changes to small business rate relief from April 2027?
Announced at the Budget on 28 October 2026 and due from 1 April 2027, subject to regulations: qualifying retail, hospitality and leisure properties in England get full relief up to £18,000, tapering to £21,000; the total-value test for extra properties becomes a single £29,999; and vape shops lose the relief.
If I don't get small business rate relief, do I pay the full rate?
Not necessarily. In England a property with a rateable value under £51,000 uses the small business multiplier, 43.2p in 2026/27 or 38.2p for qualifying retail, hospitality and leisure properties, even without small business rate relief.
Does the 1p transitional relief supplement apply if I get small business rate relief?
It can. In England in 2026/27 the 1p is added to the multiplier before reliefs for most properties in the list on 31 March 2026, unless they get transitional relief, supporting small business relief or certain other reliefs. With full small business rate relief you still pay nothing.
Is it worth challenging my rateable value to get more relief?
It may be if your value is in the taper or just above it, because a lower value both reduces the bill and increases the relief. If you already pay nothing, it won't change your current bill. You can check and challenge free through your business rates valuation account, and the value can go up as well as down.
Sources
We checked the facts on this page against these official sources on 13 November 2026:
- Business rates relief: small business rate relief (GOV.UK)
- Estimate your business rates (GOV.UK)
- 8/2026: Details of the Budget package and the multipliers for 2027/2028 (GOV.UK)
- Non-domestic rates: small business rates relief (Business Wales)
- The Non-Domestic Rating (Small Business Rate Relief) (England) Regulations 2023