Business rates from April 2026: what landlords and tenants should look out for

From 1 April 2026, every commercial property in England and Wales gets a new business rates valuation. The Valuation Office Agency has updated the rateable values that councils use to calculate bills, and the current 2023 rating list closes on 31 March 2026.  You can already look up your future rateable value on GOV.UK to see what is coming.

At the same time, the way that rateable values are worked out is being reset.  The Government has confirmed new multipliers (the pence in the pound applied to the rateable values), with permanently lower rates for eligible retail, hospitality and leisure properties under £500,000 rateable value, and a higher large property multiplier for rateable values of £500,000 and above.  The temporary retail, hospitality and leisure relief ends on 31 March 2026 and is replaced by these lower multipliers, while a refreshed Transitional Relief scheme will cap the pace of any increases after revaluation.

Why we are writing about this now?

These changes directly affect 2026/27 budgets.  You can check your future rateable value today, build it into renewals or new leases, and understand whether you may benefit from the new retail, hospitality and leisure multipliers or be caught by the large property multiplier.  

With the 2023 list closing on 31 March 2026 and the new multipliers and reliefs coming into effect on 1 April 2026, this is the key window to sense check your valuation, discuss assumptions in heads of terms, and plan for any Transitional Relief caps that may apply to your rates bill.

Exact outcomes will vary by building, but a simple rule of thumb applies to business rates: tenants are normally expected to pay business rates when they occupy, and rates are relevant for landlords were a unit is empty (after an initial empty relief period).

Overall, the wider market is calmer than late 2025 - inflation has eased and the interest rate outlook is more settled.   This is encouraging for those looking to commit to deals and renewals in 2026.

Who actually pays?

• While occupied: In most commercial lettings, the occupier (tenant) pays the business rates direct to the council. 
• When empty:  If a property becomes vacant, the owner (landlord) becomes liable after a short empty property relief (typically three months for most uses or six months for industrial/warehouse).  After that, full rates usually resume until the space is re occupied.

Why this matters

• If you are a landlord, business rates mainly bite during void periods (i.e. times when a property is vacant), so planning ahead really matters. 
• If you are a tenant taking a new lease or renewing in 2026, business rates form part of your day to day running costs whilst you are in occupation.

What might change for you?

Every property is assessed for business rates using a rateable value. Changes in April 2026 could mean your business rates bill goes up, down or stays broadly the same. 

In simple terms:

• Some could pay more - busy or improving locations, or properties that have been refurbished or expanded, may see higher assessments
• Some could pay less - less affluent locations or areas where demand is still softer may benefit from lower rateable values or adjustments
• Reliefs and appeals still matter.  There are legitimate routes to challenge or reduce what you pay if the facts support it, subject to timing and evidence. 

A simple plan for landlords (empty units)

• Know your relief window - most uses get three months’ relief and industrial/warehouse get six months.  After that, the owner pays until the unit is occupied again. Build that into your cash flow for any expected voids
• Because rates restart after the relief, shaving weeks off the void period can materially reduce your costs
• Works that improve the premises may support a higher assessment later.  This is worth factoring into your re-letting plans.

A simple plan for tenants taking new leases or renewals

• For each site, add up rent, business rates, service charge and insurance as one affordability number, before you sign.  This is the easiest way to avoid surprises. 
• If a rates bill looks out of step with reality (for example, the space is partly unusable), speak up quickly because some steps have deadlines and need evidence
• Ask for clear service charge and business rate information from your landlord early, so that you can see exactly what you are paying for.  This way, rates don’t get muddled into your other operational costs.

How we can help

Specialist business rates advisers carry out detailed, portfolio wide analysis of rateable values and likely liabilities and help tenants understand expected rates exposure when taking a new lease.  

At Higgs LLP, while we do not provide specific business rates advice, we do make sure your heads of terms and leases clearly reflect who pays what and when, so the split of responsibility for operational costs (rent, business rates, service charge and insurance) aligns with what you are expecting.  Do get in touch with our Real Estate team, if you need guidance.