What is business rates?
Business rates are a tax on non-domestic property such as shops, offices, pubs and factories. The bill is the property's rateable value multiplied by a set number of pence. In England from April 2026 there are five multipliers, from 38.2p for small retail, hospitality and leisure premises to 50.8p for the largest properties.
The Valuation Office Agency sets a rateable value for each property, roughly its yearly rental value. Bills are worked out by multiplying that value by a multiplier. A new revaluation took effect in England and Wales in April 2026. Councils collect business rates and keep part of the money to fund local services. Revaluations normally happen every three years to keep values up to date.
From April 2026 England has five multipliers. Properties under £51,000 pay 43.2p, or 38.2p if used for retail, hospitality or leisure. Properties between £51,000 and £500,000 pay 48p, or 43p for those sectors. Properties worth £500,000 or more pay a higher 50.8p. Small businesses with a rateable value under £12,000 usually pay nothing through Small Business Rate Relief. Charities get 80% mandatory relief.
Business rates raise around £30 billion a year across the UK. Critics say they penalise firms with physical premises, especially high street shops, compared with online sellers. They also discourage investment, since improving a building can raise its value. Wales, Scotland and Northern Ireland set their own systems and rates. Online retailers argue they already pay through warehouse rates, though usually on cheaper sites.
Who it affects: Businesses in premises worth £51,000 to £500,000
Some on the left want business rates reformed to shift the burden from small high street firms to big landowners and online giants.
The right often argues business rates are an outdated tax on investment and wants them cut or abolished, starting with pubs and shops.
Britain is split. Now you decide.
In Population Decides you can set the business rates multiplier in your Budget and see what happens to high streets and council funding.
Play Population Decides freeCommon questions
Who pays business rates?
Usually the occupier of a non-domestic property, or the owner if it is empty.
Do small businesses pay business rates?
Many pay nothing if their property has a rateable value under £12,000.
When were business rates last revalued?
A revaluation took effect in England and Wales from 1 April 2026.