Transitional relief: key facts
- Transitional relief only limits increases. In England the 2026 scheme caps rises caused by the revaluation; if your bill went down, the reduction isn't held back.
- 2026/27 caps: 5% for a rateable value up to £20,000 (£28,000 in London), 15% up to £100,000 and 30% above £100,000.
- Later caps: 10%, 25% and 25% plus inflation in 2027/28; 25%, 40% and 25% plus inflation in 2028/29.
- It compares bills before other reliefs. Your starting point is your rateable value on 31 March 2026 times the multiplier then; other reliefs come off after the cap.
- It stops once your bill reaches the full amount set by the revaluation, and your council applies it automatically.
- The 1p transitional relief supplement is paid in 2026/27 by most properties in the rating list on 31 March 2026 that don't get transitional relief or supporting small business relief.
- Announced at the Budget on 28 October 2026, due from 1 April 2027: qualifying retail, hospitality and leisure properties get a 0% plus inflation cap, and the 1p supplement continues to 2028/29.
- Wales: increases of more than £300 are phased in, paying 33% of the extra in 2026/27 and 66% in 2027/28.
What is transitional relief and what are the caps?
Transitional relief is an automatic cap on how much your business rates bill in England can rise from one year to the next because of a revaluation. For the 2026 revaluation the cap depends on your new rateable value and runs from 1 April 2026 to 31 March 2029.
Every few years all business properties get new rateable values. At the 2026 revaluation new values came in on 1 April 2026, based on rents at 1 April 2024. Some went up a lot, especially where the 2023 values reflected the pandemic. Transitional relief phases those rises in. The government pays for it partly through the 1p supplement explained below.
| Rateable value on 1 April 2026 | 2026/27 | 2027/28 | 2028/29 |
|---|---|---|---|
| Up to £20,000 (£28,000 in London) | 5% | 10% plus inflation | 25% plus inflation |
| £20,001 (£28,001 in London) to £100,000 | 15% | 25% plus inflation | 40% plus inflation |
| Over £100,000 | 30% | 25% plus inflation | 25% plus inflation |
- Your band is fixed by your new value. The regulations use the rateable value for 1 April 2026, not the old 2023 value. The higher London thresholds apply to properties on a London borough's or the City's rating list.
- "Inflation" has a set meaning. The regulations measure it as the change in the small business multiplier from one year to the next. That multiplier is 43.2p for 2026/27, and 44.7p was announced for 2027/28.
- The caps compound. Each year's cap is applied to the previous year's capped figure, not to your old bill.
- It's only for increases. The regulations only cap a bill that has gone up. If your full 2026/27 bill is lower than before, you pay the lower amount straight away.
The previous scheme, for the 2023 revaluation, ran until 31 March 2026 with different caps for larger properties. It has now ended, and the 2026 scheme starts afresh from your position on 31 March 2026.
How is transitional relief worked out?
The council takes your rateable value on 31 March 2026 times the multiplier that applied then (the base liability), adds the cap percentage, and compares it with your full new bill before reliefs. If the full bill is higher, you're charged the capped amount, and other reliefs then come off that.
- Base liability. Your rateable value on 31 March 2026 times the multiplier that applied on that day. For most properties that's the 2025/26 small business multiplier of 49.9p (rateable value under £51,000) or the standard multiplier of 55.5p.
- Full new amount. Your rateable value on 1 April 2026 times your 2026/27 multiplier plus 1p. The 1p is the transitional relief supplement; it's included in this comparison even though you don't pay it if you end up on transitional relief.
- Cap. Base liability × 1.05, 1.15 or 1.30 for 2026/27, depending on your band.
- Compare. If the full amount is higher than the capped amount, you're charged the capped amount, worked out day by day.
- Other reliefs. Mandatory reliefs such as small business rate relief and charitable relief are taken off after the cap. Discretionary reliefs, including supporting small business relief and pubs relief, come after that.
Transitional relief stops for good once the capped figure would be more than your normal bill. It also doesn't apply when rural rate relief means you pay nothing. The City of London premium and the London Business Rates Supplement sit outside transitional relief and are added on top.
What does transitional relief look like in pounds?
An office whose rateable value rose from £40,000 to £60,000 would have a full 2026/27 bill of £29,400 including the 1p supplement. Transitional relief caps it at £22,954, which is 15% above its £19,960 base liability.
These are simplified full-year illustrations using the published multipliers and the rules in the transitional relief regulations. They assume nothing changes during the year and no other reliefs apply unless stated. Your council's figures may differ, for example if your value changed during the year.
Example 1: an office outside London
| Step | Sum | Amount |
|---|---|---|
| Base liability (31 March 2026) | £40,000 × 0.499 | £19,960 |
| Full 2026/27 amount | £60,000 × (0.48 + 0.01) | £29,400 |
| Band | £60,000 is in the £20,001 to £100,000 band | 15% cap |
| Capped amount | £19,960 × 1.15 | £22,954 |
| Transitional relief | £29,400 − £22,954 | £6,446 |
The office pays £22,954 for 2026/27 and no separate 1p supplement. In 2027/28 the cap becomes 25% plus inflation on top of £22,954, and relief continues until the capped figure catches up with the full bill.
Example 2: a London shop that lost retail relief
A shop on a London borough's rating list. Its rateable value went from £22,000 to £26,000, and in 2025/26 it got 40% retail, hospitality and leisure relief.
- Base liability: £22,000 × 0.499 = £10,978
- Full 2026/27 amount, at the 38.2p small business retail, hospitality and leisure multiplier plus 1p: £26,000 × 0.392 = £10,192
- £10,192 is lower than £10,978, so no transitional relief, even though the rateable value went up.
But the shop's actual 2025/26 bill was £10,978 × 0.6 = £6,586.80, so it has still gone up because the 40% relief ended. That is what supporting small business relief is for: it could limit the rise to the greater of 5% (£329.34) or £800, giving a 2026/27 bill of £6,586.80 + £800 = £7,386.80 if the council confirms the shop qualifies.
Want to try your own figures without transitional relief? Our business rates calculator gives the full 2026/27 bill, and how business rates are calculated explains each step.
What is the transitional relief supplement?
It's an extra 1p added to the multiplier in England in 2026/27 for properties that were in the rating list on 31 March 2026 but aren't getting transitional relief or supporting small business relief. It helps pay for transitional relief, and the government plans to keep it until 2028/29.
So if your property's bill went down or rose by less than the cap, you'll usually see the 1p on your bill instead. A 48p multiplier becomes 49p and 38.2p becomes 39.2p.
- Who pays: properties in the rating list on 31 March 2026 and every day since, with a rateable value above zero.
- Who doesn't: properties getting transitional relief or supporting small business relief; properties getting rural rate relief, heat networks relief or public lavatories relief; and new properties added to the list since 1 April 2026 (unless they were created by splitting or merging existing ones).
- When it's added: before reliefs. It's shown as a gross amount, and reliefs such as small business rate relief then apply to the total including the supplement. If you get 100% small business rate relief, you still pay nothing.
- How long: the 1p was set for 2026/27. Extending it to 2027/28 and 2028/29 was announced at the Budget on 28 October 2026 and is due from 1 April 2027, subject to regulations.
Our business rates multipliers guide lists every rate. GOV.UK's estimate tool leaves the supplement out, so its figures can be lower than your bill.
What if my property is new or its rateable value changes?
New properties added to the rating list after 31 March 2026 don't get transitional relief and don't pay the 1p supplement. If your rateable value goes up during the scheme, the extra is usually charged in full; if it goes down, your capped bill falls in proportion.
| Situation | What happens in England |
|---|---|
| A new property, first in the list after 31 March 2026 | No transitional relief and no 1p supplement. You pay the full bill from the start, less any other reliefs. |
| Rateable value goes up after 1 April 2026 (an extension or improvement, say) | The capped amount carries on, and the extra value is charged in full at your multiplier plus the supplement. Improvement relief may delay the increase for qualifying works. |
| Rateable value goes down after 1 April 2026 (after a check or challenge, say) | The capped amount is reduced in proportion to the lower value. |
| The property was split or merged after 1 April 2026 | Special rules share the protection between the new properties. Your council works it out. |
| The property changed physically on 1 April 2026 itself | The Valuation Office can certify what the new value would have been without the change, and that figure is used for the cap. |
| A new tenant or owner takes over | The test in the regulations is whether the property was in the list on 31 March 2026, not who occupies it. Ask the council to confirm how your bill is worked out. |
| The property is empty | Transitional relief can apply to empty-property rates too, after any empty property relief ends. |
What is a transitional certificate?
A transitional certificate is a value the Valuation Office issues for transitional relief when a rateable value in the list was wrong on a key date, or the property changed on revaluation day. Your council then uses the certificate value instead of the usual rateable value in the calculation.
Transitional relief depends on two dates: your value on 31 March 2026 (the old list) and on 1 April 2026 (the new list). If either is later found to be wrong, the cap would be wrong too. So the Valuation Office can certify:
- the correct 31 March 2026 value, if the 2023 list entry was inaccurate. This can raise or lower your base liability.
- the correct 1 April 2026 value, if the new entry was inaccurate, which can affect your band and full amount.
- what the 1 April 2026 value would have been without a change to the property on that day.
The Valuation Office can issue a certificate itself, or after a request from you or the council. It often follows a check or challenge that changes a value. A copy goes to you and the council.
A certificate is separate from a challenge to your rateable value. Our guide on how to challenge business rates covers check, challenge and appeal.
How does transitional relief work with supporting small business relief?
They protect against different things. Transitional relief caps rises in the gross bill caused by a higher rateable value. Supporting small business relief caps rises in the bill after reliefs for people who lost small business rate relief, rural rate relief, 2025/26 retail, hospitality and leisure relief or 2023 supporting small business relief.
| Transitional relief | Supporting small business relief | |
|---|---|---|
| Starting point | 2025/26 gross bill (rateable value × multiplier) | 2025/26 bill after small business, rural, retail/hospitality/leisure or 2023 supporting small business relief |
| 2026/27 limit | 5%, 15% or 30% | The greater of £800 or 5%, 15% or 30% |
| Who can get it | Any property in the list on 31 March 2026 whose bill went up | Occupied properties that had one of those reliefs on 31 March 2026; not charities or community amateur sports clubs |
| 1p supplement | Not paid | Not paid |
| How you get it | Automatic | Automatic (ask your council if it's missing) |
Supporting small business relief is built on the same framework as transitional relief and is applied afterwards as a discretionary relief. Example 2 above shows why it matters: a property can lose a big relief, see its bill rise, and still get no transitional relief. Our small business rate relief guide covers the main relief for smaller properties.
What changes to transitional relief are due from April 2027?
Announced at the Budget on 28 October 2026 and due from 1 April 2027: qualifying retail, hospitality and leisure properties get a 0% plus inflation transitional relief cap in 2027/28 and 2028/29, and the 1p supplement continues for both years. The other caps are unchanged.
- A real-terms freeze for retail, hospitality and leisure. If your property counts as qualifying retail, hospitality or leisure on 1 April 2027 (and again on 1 April 2028), your cap becomes 0% plus inflation instead of 10%, 25% or 40% plus inflation. The test is made each year. There's no rateable value limit, but a property that's empty on 1 April can't qualify that year.
- What it doesn't cover. Rises from improvements that increase your rateable value, or from losing other reliefs such as improvement relief or hardship relief after 1 April 2026.
- Pubs and live music venues also get a bill freeze capped by inflation, alongside pubs relief rising to 35%. Our pubs guide has the details.
- Supporting small business relief: qualifying retail, hospitality and leisure properties also get the inflation-only cap, without the £800 minimum.
- The 1p supplement continues in 2027/28 and 2028/29 for properties not on transitional relief or supporting small business relief.
- New multipliers for 2027/28 were announced: 49.7p standard, 44.7p small business, 44.5p and 39.5p for retail, hospitality and leisure, and 52.5p high-value.
Vape shops and adult gaming centres are due to lose the retail, hospitality and leisure multipliers from 1 April 2027, which also takes them out of the freeze. All of this is subject to regulations that hadn't been made when we checked on 13 November 2026.
How can I check transitional relief has been applied to my bill?
Look for a transitional relief line on your 2026/27 bill, then repeat the sum: your 31 March 2026 rateable value times the multiplier then, plus the cap for your band. If you were expecting relief and there isn't any, or you're shown paying the 1p supplement as well, ask your council.
- Find both rateable values. Your bill shows the 2026 value. The Valuation Office's online service shows current and past values, including the one on 31 March 2026.
- Work out your base liability. Old value × 0.499 (under £51,000) or × 0.555 (£51,000 or more). The City of London had its own multipliers.
- Apply your cap. × 1.05, 1.15 or 1.30, using your new value's band and the London thresholds if they apply.
- Compare with the bill. If your full new bill (new value × multiplier + 1p) is higher than the capped figure, your bill before other reliefs should match the capped figure for a full year.
- Check the extras. A transitional relief line and a 1p supplement line shouldn't both appear. Other reliefs should come off after transitional relief.
Councils set out bills differently, and part-year changes make it harder, so contact your council's business rates team if the numbers don't add up. The council deals with relief; it can't change your rateable value.
The bigger question: is the rateable value right?
Transitional relief slows a rise but doesn't change the value behind it, and the cap loosens each year until you're paying the full amount. If the 2026 value looks too high, or the facts held about your property are wrong, you can check and challenge it free yourself through a business rates valuation account, or a rating surveyor can do it for you. A lower value could reduce your full bill and, while you're on transitional relief, reduce the capped bill in proportion, though it can also go up or stay the same.
How does transitional relief work in Wales?
Wales has its own scheme for the 2026 revaluation. If your bill went up by more than £300 because of the revaluation, you pay 33% of the increase in 2026/27 and 66% in 2027/28, then the full bill from 2028/29.
- Who qualifies: properties in the list on 31 March 2026, occupied on that day by the same ratepayer who's liable now. If the ratepayer changes, the relief stops, and new ratepayers can't get it.
- How it's measured: the bill on 31 March 2026 and the bill on 1 April 2026, both after mandatory reliefs such as small business rates relief, unlike England's gross comparison.
- A fixed deduction: relief is 67% of the increase in 2026/27 and 34% in 2027/28. It's worked out once, at 1 April 2026, and isn't increased if the multiplier rises in 2027/28. It's only recalculated if your bill goes down, for example after a successful challenge, or you stop being the ratepayer.
- Empty property: no transitional relief during the 3-month (6-month industrial) empty period, but it can continue afterwards.
- Order: it comes off after mandatory reliefs and before discretionary reliefs given by the council.
A simple illustration: if your bill after mandatory reliefs was £10,000 on 31 March 2026 and £13,000 on 1 April 2026, the increase is £3,000. Relief in 2026/27 is 67% of £3,000 = £2,010, so you pay £10,990. In 2027/28 the deduction is 34% of £3,000 = £1,020, taken off that year's bill.
There's no 1p supplement in Wales, and Welsh multipliers differ (0.350 retail, 0.502 standard and 0.515 higher in 2026/27). Your council applies the relief automatically.
Related guides
Transitional relief: frequently asked questions
Do I need to apply for transitional relief?
No. In England and Wales the council applies it automatically if you qualify. If you think it's missing or wrong, contact your council's business rates team.
What are the transitional relief caps for 2026/27?
In England the increase is capped at 5% for a rateable value up to £20,000 (£28,000 in London), 15% up to £100,000 and 30% above £100,000. The caps rise in 2027/28 and 2028/29 and include inflation.
Is the cap based on my old bill after reliefs?
No. In England it's based on your rateable value on 31 March 2026 times the multiplier that applied then, before reliefs. Reliefs come off after the cap. Supporting small business relief is the scheme that looks at the bill after reliefs.
Why am I not getting transitional relief when my rateable value went up?
Multipliers fell for many properties in 2026/27, so a higher rateable value doesn't always mean a higher gross bill. If your bill rose because you lost a relief, supporting small business relief may help instead.
Does transitional relief work if my bill went down?
In England the 2026 scheme only limits increases. If your full bill is lower than your base liability, you pay the lower amount straight away, usually with the 1p supplement.
Why does my bill show a transitional relief supplement?
Most properties in the rating list on 31 March 2026 pay an extra 1p in the pound in 2026/27 if they don't get transitional relief or supporting small business relief. It helps fund transitional relief and is due to continue to 2028/29.
Can I get transitional relief on a new property?
No. Only properties in the rating list on 31 March 2026 qualify in England. New properties don't pay the 1p supplement either, unless they were formed by splitting or merging an existing property.
What happens to transitional relief when my rateable value is reduced?
In England the capped bill is reduced in proportion to the lower value from the date the change takes effect. In Wales the relief is recalculated from the effective date of the decrease.
What is a transitional certificate?
It's a value the Valuation Office certifies for the transitional relief calculation when a rateable value on 31 March or 1 April 2026 was wrong, or the property changed on revaluation day. You can appeal within 6 months of it being issued.
Do I get both transitional relief and small business rate relief?
You can. In England the transitional relief cap is worked out first, then small business rate relief is taken off the capped amount.
Will transitional relief change from April 2027?
Announced at the Budget on 28 October 2026 and due from 1 April 2027: qualifying retail, hospitality and leisure properties get a 0% plus inflation cap in 2027/28 and 2028/29. Other caps stay as set, and the 1p supplement continues.
Is transitional relief the same in Wales?
No. Wales phases in increases of more than £300 over two years, paying 33% of the increase in 2026/27 and 66% in 2027/28. It is based on bills after mandatory reliefs, and stops if the ratepayer changes.
Should I challenge my rateable value if I'm on transitional relief?
It may be worth checking. Transitional relief only slows a rise, and the caps loosen each year. You can check and challenge free through a business rates valuation account, or a rating surveyor can do it for you; the value can go up, down or stay the same.
Sources
We checked the facts on this page against these official sources on 13 November 2026:
- Business rates relief: transitional relief (GOV.UK)
- 5/2025: Confirmation of Budget package and the non-domestic rating multipliers for 2026/2027 (GOV.UK)
- 8/2026: Details of the Budget package and the multipliers for 2027/2028 (GOV.UK)
- The Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2026 (legislation.gov.uk)
- Transitional Rates Relief for the 2026 revaluation (Business Wales)
- Estimate your business rates (GOV.UK)