Government Plans Business Rates Reset

The Government has launched a consultation regarding new legislation imposing up to 20% on rates bills for larger property occupiers in England from 1 April 2026.

With these new rates, the Government is aiming to reform how business rates relief shapes up for retail, hospitality and leisure businesses. This will happen by offering 40% off rates bills for any properties with a rateable value up to £51,000. To fund this relief, a tariff will be imposed on properties with a rateable value of £500,000 or more.

Adopting this approach would be affording breathing room to small and micro businesses, that is paved by companies operating in bigger, more valuable spaces.

The consultation, launched this week, intends to give local authorities direct financial impetus regarding rates income, for the first time since their inception in 2013.

Further clarity on this measure and how it will affect hospitality businesses is expected to confirmed in the Autumn statement, due late October / early November 2025.

An entire reset of business rates is set to take place in 2026/27 when Business Rates Baselines (BRBs) and Baseline Funding Levels (BFLs) will be established for each local authority. The consultation posits that reforming business rates allows for a redistribution of business rates to places they are most needed. The BFLs are to be based on current assessments measuring local need as a component of wider local government funding reforms due in 2026/27. The reset of business rates is considered a crucial aspect of this.

The consultation is open for eight weeks, closing on 2nd June – let us know what you think about these plans by emailing [email protected] so we can voice your thoughts in response to the consultation.