From 1 April 2026, the business rates system in England and Wales will undergo one of its most significant resets in recent years. For retailers, hospitality operators and food and beverage businesses that are already managing tight margins and rising operating costs, the implications of these changes make early preparation increasingly important — particularly as there are specific actions that should be taken now to preserve valuable rights under the current system.

These sectors continue to operate in a challenging environment where cost control, portfolio optimisation and flexibility are already high on the priority list. Business rates — often the second-highest fixed cost after rent — remain an important but often complex part of that picture.

Here, Dominic Beddow breaks down what’s changing, where the risks sit and how businesses can turn this shift into an opportunity to prepare for the new rates landscape.

The current position

Business rates are currently calculated by applying a national multiplier to a property’s rateable value, as assessed by the Valuation Office Agency (VOA). The rateable value broadly reflects the annual rent that the property could’ve achieved at a fixed valuation date.

Post-pandemic, many businesses have benefitted from temporary retail, hospitality and leisure (RHL) relief, which has reduced headline rates liabilities by 40%. Combined with other short-term COVID support measures, this has helped to soften the impact of wider economic disruption. These reliefs, however, are time-limited and were never intended to be permanent.

At the same time, many current rateable values are based on historic rental evidence, meaning that for many high street and shopping centre locations, they no longer reflect today’s trading realities. As a result, the current business rates position isn’t a reliable guide to what businesses will be paying from 1 April 2026.

What’s changing from 1 April 2026

Three key changes will come into effect simultaneously:

1. A national revaluation

All non-domestic properties in England and Wales will be revalued based on open market rental evidence as of 1 April 2024, not current rents or turnover performance.

For retail properties, this will produce a mixed picture:

• Some locations (particularly prime or resilient retail locations) may see increases in rateable value.
• Others may benefit from reductions, particularly where rental values have softened post-pandemic or where trading patterns have shifted.

31 March 2026 will be the final date that businesses can challenge or amend the current rating list. 

After this date: 

• The 2023 list will be closed.
• Any over-assessments not challenged by this date will become permanent, resulting in loss of opportunities to claim refunds for historic overpayments.
• Material changes of circumstances (i.e., where physical or operational changes have occurred) can’t be reflected in the valuation if action hasn’t been taken prior to 31 March 2026.
• Any errors in the VOA’s factual assumptions (i.e., relating to floor areas, layout, configuration, use, etc.) not challenged prior to 31 March 2026 may be carried into the 2026 valuation.

2. The end of temporary reliefs

The familiar RHL relief will come to an end on 31 March 2026 in both England and Wales. From 1 April onwards, businesses will no longer benefit from a blanket percentage discount on their bill simply by virtue of sector-based relief.

3. The introduction of new, permanent multipliers

In place of temporary relief, the Government will be introducing new, permanent business rates multipliers.

In England, qualifying retail, hospitality and leisure properties with a rateable value below £500,000 will benefit from lower multipliers, while properties with a rateable value of £500,000 or more will be subject to a higher ‘high-value’ multiplier.

This reform is designed to provide longer-term support for smaller premises while shifting more of the burden towards larger properties, including flagship stores, large restaurants, hotels and distribution-led assets.

Wales will also introduce new multipliers and transitional support, alongside its own relief package for affected sectors.

Government support available in England & Wales to soften the impact

Transitional relief

In an effort to support ratepayers facing large increases at revaluation, transitional relief will be automatically applied where changes go up or down by more than a set percentage. This is designed to phase in increases gradually.

Hospitality sector support

The Government has announced a targeted support package for the hospitality industry — particularly pubs and some live music venues — who’ll receive a 15% discount from 1 April 2026, followed by a freeze on further increases for two years.

Six essential steps for retail, hospitality and food & beverage businesses

For most businesses, the April 2026 changes should be viewed as a planning point rather than a cliff edge. The combined effect of revaluation and multiplier reform means there’ll be winners and losers — perhaps within the same portfolio.

In practical terms, business should use the lead-in time to:

1. Challenge any existing errors and report material changes of circumstances prior to 1 April 2026 — 31 March 2026 is the final deadline to challenge the current rating list. After this date, any existing overassessment may become permanent and the right to claim refunds for historic payments may be lost.
2. Review future rateable values — draft rateable values are already available on the VOA website . Errors in floor areas, layout or use can materially affect liability, so checking that those details are accurate is a sensible first step and will help to avoid issues later down the line.
3. Prepare for the loss of relief — even where new lower multipliers apply, the removal of RHL relief may still result in a net increase in rates for some businesses.
4. Understand how the changes affect individual sites — for businesses with multiple sites, the interaction between revaluation, the loss of relief and new multipliers may mean that some sites become significantly more expensive to operate, while others may see an improved position. Portfolio-wide modelling is essential, particularly where some properties are likely to fall above and others below key rateable value thresholds.
5. Understand transitional relief — while the transitional relief scheme may soften increases in the short term, it simply delays the full impact by phasing in the additional cost.
6. Factor business rates into property strategy — rates liability should be considered alongside:

• Lease renewals and re-gears.
• Break options and exit strategy.
• Store, restaurant or venue closures.
• Relocations, downsizing or reconfiguration.
• Rent review negotiations.

Rates exposure is increasingly a key driver of whether a site remains viable, not just what the headline rent says.