Small Business Rate Relief helps eligible businesses reduce the amount of Business Rates they pay. These rates work in a similar way to Council Tax, although they apply to commercial properties instead of homes.
Most businesses operating from physical premises must pay Business Rates, which include:
- Shops
- Offices
- Cafes
- Restaurants
- Warehouses
- Salons
- Workshops
- Industrial units
- Studios
The amount you pay depends on your property’s rateable value. The Valuation Office Agency (VOA) calculates this figure, basing the valuation on estimated rental values. These estimates reflect the open market rental value at a set point in time.
If your property has a lower rateable value, you may qualify for relief. Sometimes, you may not need to pay any Business Rates at all.
Qualifying for Small Business Rate Relief
You may qualify for Small Business Rate Relief if:
- Your property has a rateable value below £15,000
- You occupy the property
- Your business mainly uses one property
- Your property sits within England
The scheme does not apply to empty properties. You also cannot receive Small Business Rate Relief and Charitable Rate Relief at the same time. Your local council decides which relief applies to your circumstances.
Understanding Rateable Value
A rateable value represents the estimated annual rental value of a commercial property. The VOA calculates this figure using market rental evidence. Current valuations use estimated rental values from April 2021.
The following factors can affect a property’s rateable lvaue:
- Location
- Property size
- Property type
- Local rental demand
- Nearby facilities
You can check your property’s rateable value through the GOV.UK website. Additionally, a lower valuation could reduce your Business Rates bill considerably.
How Much Relief You Can Get
The amount of relief depends on your property’s rateable value.
- You receive 100% relief if your property has a rateable value of £12,000 or less (You pay no Business Rates)
- The relief reduces gradually if your property has a rateable value between £12,001 and £15,000
This gradual reduction is Tapered Relief. The below table shows how the taper works.
| Rateable Value | Percentage Reduction |
|---|---|
| Up to £12,000 | 100% |
| £12,750 | 75% |
| £13,500 | 50% |
| £14,250 | 25% |
| £15,000 | 0% |
For example: A property with a rateable value of £13,500 receives 50% relief.
Small Business Rate Relief Thresholds
The following thresholds apply in England from 1 April 2026.
| Rateable Value | Relief Available | Multiplier Used |
|---|---|---|
| Up to £12,000 | 100% relief | Small business multiplier |
| £12,001 to £15,000 | Tapered relief | Small business multiplier |
| £15,001 to £51,000 | No relief | Small business multipleir |
| Over £51,000 | No relief | Standard multiplier |
The small business multiplier stands at 43.2p from 1 April 2026 to 31 March 2027.
The standard multiplier stands at 48p from 1 April 2026 to 31 March 2027.
Retail, hospitality and leisure businesses may qualify for a lower multiplier of 38.2p if the property has a rateable value below £51,000.
The Small Business Multiplier
Business Rate calculations use a multiplier, which converts your property’s rateable value into your annual bill. Properties with lower rateable values usually qualify for the small business multiplier. This multiplier sits below the standard rate.
For example: A property has a rateable value is £20,000. With the 43.2p small business multiplier, the estimated bill is £8,640.
Without the lower multiplier, the bill would increase. As a result, even businesses that do not qualify for Small Business Rate Relief may still receive reduced Business Rates.
How to Apply for Small Business Rate Relief
You should contact your local council to apply, as they can:
- Confirm whether you qualify
- Explain the application process
- Check if other reliefs apply
- Update your account when circumstances change
Some councils apply relief automatically, however, many require an application.
You may need to provide:
- Your business details
- Your property address
- Information about additional properties
- Your Business Rates account reference
Reporting Changes
You should always report major changes to your local council quickly. This helps you avoid unexpected backdated bills.
You should report changes if:
- Your property becomes empty
- You take on another property
- You extend or renovate the premises
- Your business activity changes
- Your business moves location
Your relief may increase or decrease after these changes. In most cases, the updated charges apply from the date of the change.
Failing to report changes could result in:
- Backdated charges
- Penalties
- Incorrect bills
- Overpayments
Using More Than One Property
Many business expand into additional premises over time. Fortunately, getting a second property does not always end your relief immediately.
- You keep relief on your main property for 12 months if you took on a second property before 27 November 2025
- You keep relief on your main property for 36 months if you took on a second property on or after 27 November 2025
After the relief period, you may still qualify if:
- None of your other properties has a rateable value above £2,899
- The total rateable value stays below £20,000
- Businesses in London stay below £28,000 in total
These rules help growing businesses manage costs during expansion.
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK tax laws and regulations are subject to change. Please speak to an accountant or tax professional for advice tailored to your individual circumstances. Pi Accountancy accepts no responsibility for any issues arising from reliance on the information provided.