Small Business Rates Relief 2026 Guide: Thresholds, New Multipliers, and the 36-Month Rule
Small business rates relief (SBRR) is a government scheme that reduces or eliminates the business rates bill for eligible small businesses in England. Properties with a rateable value of £12,000 or below pay nothing. Those between £12,001 and £15,000 receive tapered relief.
From 1 April 2026, five new multiplier rates took effect under the Non-Domestic Rating (Multipliers and Private Schools) Act 2025, replacing the previous two-rate system.
Key Takeaways
- Properties with a rateable value of £12,000 or below qualify for 100% small business rates relief, meaning no business rates are payable.
- From 27 November 2025, businesses that acquire a second property retain SBRR on their main premises for 36 months, extended from the previous 12-month grace period under the Autumn Budget 2025.
- The 2026 Supporting Small Business Relief scheme caps bill increases at £800 per year for businesses that lost SBRR, Rural Rate Relief, or Retail, Hospitality and Leisure Relief as a result of the April 2026 revaluation.
What Is Small Business Rates Relief?
Small business rates relief is a government discount applied by the local billing authority that reduces or removes the business rates bill for qualifying small businesses in England.
The Valuation Office Agency sets each property’s rateable value, which determines both eligibility for the SBRR discount and the applicable multiplier rate.
SBRR applies to businesses occupying non-domestic property in England, covering a wide range of enterprise types from sole traders and partnerships through to limited companies.
Two separate benefits run in parallel, and most businesses are only aware of one. The SBRR discount removes up to 100% of the bill for properties with a rateable value at or below £12,000.
A distinct automatic benefit, the small business multiplier, applies a lower pence-per-pound tax rate to every property with a rateable value below £51,000, regardless of whether the SBRR discount applies at all.
A business with a rateable value of £20,000 does not qualify for the SBRR discount, but its bill is still calculated using the lower small business multiplier rather than the standard rate.
At 2026/27 rates, that business pays £8,640 (at 43.2p) rather than £9,600 (at 48.0p), a saving of £960 per year without any formal application to the scheme.
SBRR is established under the Local Government Finance Act 1988, as amended by the Non-Domestic Rating Act 2023.
Who Qualifies for Small Business Rates Relief?
Eligibility for SBRR depends on the rateable value of the occupied property and whether it is the business’s sole or main premises.
The Valuation Office Agency publishes each property’s rateable value on its online register, which any occupier can check without charge.
The core eligibility conditions are:
- The property has a rateable value of £15,000 or below
- The property is the business’s only premises, or the main property where additional premises each have a rateable value below £2,899
- The combined rateable value of all properties occupied does not exceed £20,000 (£28,000 in London)
- The property is in active occupation, vacant properties do not qualify
A business with a rateable value of £13,500 receives 50% relief on its bill. At the 2026/27 small business non-RHL multiplier of 43.2p, the bill before relief is £5,832. After 50% SBRR is applied, the payable amount reduces to £2,916 for the year.
Properties already receiving charity relief or Community Amateur Sports Club relief cannot receive SBRR at the same time. Businesses must notify their billing authority of any change in circumstances that could affect eligibility, including taking on additional properties.
Small Business Rates Relief Thresholds and Multipliers 2026 to 2027
From 1 April 2026, five separate multipliers replaced the previous two-rate system following the April 2026 revaluation.
The new structure was introduced under the Non-Domestic Rating (Multipliers and Private Schools) Act 2025, which received Royal Assent in April 2025, and applies from 2026/27 onward.
| Rateable Value Band | SBRR Discount | Applicable Multiplier (2026/27) | Property Type |
|---|---|---|---|
| Up to £12,000 | 100% | 43.2p | Non-RHL small business |
| £12,001 to £15,000 | Tapered (100% to 0%) | 43.2p | Non-RHL small business |
| £15,001 to £50,999 | None | 43.2p | Non-RHL small business |
| Up to £50,999 | None | 38.2p | RHL small business |
| £51,000 to £499,999 | None | 48.0p | Standard non-RHL |
| £51,000 to £499,999 | None | 43.0p | Standard RHL |
| £500,000 and above | None | 50.8p | Large property |
Figures confirmed as of June 2026 via GOV.UK and the Ministry of Housing, Communities and Local Government (MHCLG).
Widely circulated claim: The small business multiplier for 2025/26 was 43.2p.
Correct position: The small business multiplier for 2025/26 was 49.9p. The figure of 43.2p is the confirmed small business non-RHL multiplier from 1 April 2026 to 31 March 2027.
Source: GOV.UK, Business rates relief: Small business rate relief, updated April 2026.
The Second Property Rule and the Grace Period Extension
From 27 November 2025, businesses that take on a second property retain SBRR on their main premises for 36 months.
This extension, announced at the Autumn Budget 2025, replaced the previous 12-month grace period for any second property occupation beginning on or after that date.
When a second property is acquired, the following steps determine what happens to existing relief:
- Notify the billing authority immediately that a second property has been occupied.
- Confirm the date the occupation began. Properties acquired before 27 November 2025 carry a 12-month grace period. Properties acquired on or after that date carry a 36-month grace period.
- During the grace period, SBRR continues on the main property only. No relief applies to the second property under SBRR.
- After the grace period ends, check whether both retention conditions are met: no other property has a rateable value above £2,899, and the combined rateable value of all properties is below £20,000 (£28,000 in London).
- If either condition is not met, SBRR ends. Failure to notify the billing authority of a second property can result in backdated increases to the rates bill.
Businesses already mid-period under the 12-month grace period rule before 27 November 2025 remain on that original basis. The 36-month extension applies only to second properties occupied from that date onward.
How To Apply for Small Business Rates Relief?
SBRR is applied by the local billing authority, not HMRC, and in most cases arrives automatically on the business rates bill without a formal application.
The process for securing SBRR, where it has not been applied automatically, runs as follows:
- Check the property’s current rateable value using the Valuation Office Agency’s online service at GOV.UK. The rateable value determines both eligibility and the level of relief.
- Confirm the property is the sole or main business premises, and that any additional properties each have a rateable value below £2,899.
- Check the current business rates bill. If SBRR is already applied, no further action is required unless circumstances change.
- If relief is not showing on the bill and the property appears to qualify, contact the local billing authority directly. Locate the Property Reference Number on the front of the business rates bill. This number is required to submit a relief application.
- Complete and submit the SBRR application form to the local council. Application forms vary by billing authority but are available on the council’s website.
- Notify the billing authority of any changes in circumstances, including property improvements that increase rateable value, a change in business activity, or the occupation of any additional properties.
Keeping accurate records of rateable value assessments, relief awards, and billing authority correspondence is straightforward with the right small business accounting software, which can also flag subsidy control thresholds as relief accumulates.
Supporting Small Business Relief and the 2026 Safety Net
The 2026 Supporting Small Business Relief (SSBR) scheme protects businesses that lost some or all of their SBRR, Rural Rate Relief, or Retail, Hospitality and Leisure Relief as a direct result of the April 2026 revaluation.
Bill increases are capped at £800 per year or the applicable transitional relief percentage, whichever is greater. The scheme runs from 2026/27 to 2028/29 and is applied automatically by billing authorities.
SSBR eligibility requires the property to be occupied and the ratepayer to have lost qualifying relief at the 2026 revaluation.
The 2023 SSBR scheme, which capped increases at £600 per year, received a one-year extension to April 2027 for businesses already on it. Ratepayers on the extended 2023 scheme do not also qualify for the three-year 2026 SSBR scheme.
The April 2026 revaluation, which used market values as of 1 April 2024, brought approximately 104,000 businesses into the rates regime for the first time, according to the Federation of Small Businesses.
The FSB has written to the Treasury calling for the threshold to rise from £15,000 to £25,000, which it estimates would remove 200,000 small businesses from the rates system entirely.
Until any such change takes effect, the 2026 SSBR scheme remains the primary protection for businesses brought into rates by the revaluation.
Businesses that do secure relief often reinvest the savings into growth areas such as small business web design, where a professional online presence can offset reduced footfall from higher street costs.
Relief under SSBR is subject to the Subsidy Control Act 2022. Total relief received across all schemes must not exceed the £315,000 Minimum Financial Assistance threshold over any rolling three-year period.
Conclusion
For eligible small businesses in England, small business rates relief can eliminate the business rates bill entirely or reduce it to a fraction of the standard charge.
For owners navigating the 2026 revaluation changes alongside wider cost pressures, working with a business coach for a small business can help identify the full range of reliefs and exemptions available.
Following the April 2026 revaluation and the shift to five new multipliers, businesses should verify their current rateable value via the Valuation Office Agency and check that the billing authority has applied relief correctly.
Small business rates relief means lower rates bills or no rates bill at all for eligible businesses in 2026, provided eligibility conditions are met and changes in circumstances are reported promptly.
FAQ
Is small business rates relief applied automatically?
Yes, in most cases. Where the billing authority already holds the relevant rateable value information and the property is registered as the business’s sole premises, SBRR is applied without a formal application. If the relief is not showing on the bill and the rateable value falls within the eligible threshold, the ratepayer must contact the local billing authority directly to request it.
Can a business get small business rates relief on two properties?
No, not on both simultaneously. SBRR applies to the main property only. When a second property is acquired, the grace period preserves relief on the main premises. For second properties occupied on or after 27 November 2025, that grace period is 36 months. After the grace period, relief on the main property continues only if all other properties have rateable values below £2,899 and the total combined rateable value stays below £20,000.
What is the difference between SBRR and the small business multiplier?
SBRR is a discount scheme that reduces or removes the rates bill for properties with a rateable value at or below £15,000. The small business multiplier is a separate, lower tax rate applied to every property with a rateable value below £51,000, whether or not SBRR applies. A business above the SBRR threshold still benefits from the multiplier automatically.
What rateable value qualifies for 100% small business rates relief?
A rateable value of £12,000 or below qualifies for 100% SBRR, meaning no business rates are payable. Properties with rateable values between £12,001 and £15,000 receive tapered relief on a sliding scale from 100% down to 0%. Above £15,000, the SBRR discount does not apply, though the small business multiplier still applies up to £51,000.
What is the Supporting Small Business Relief scheme and who qualifies?
SSBR is a transitional protection scheme for businesses that lost SBRR, Rural Rate Relief, or RHL Relief because their rateable value increased at the April 2026 revaluation. Eligible businesses have bill increases capped at £800 per year or the relevant transitional relief percentage. The scheme covers 2026/27 to 2028/29 and is applied automatically, with no application required.
Disclaimer: This article is for informational purposes only and does not constitute formal financial or legal advice; always verify your specific eligibility with your local billing authority.
