At TechRound we’ve written a number of guides explaining how to register your business, operate as a sole trader and pay corporation tax – today we’re covering business rates, the tax charged on your business property.
This guide will focus on England and Wales. If you are in Scotland or Northern Ireland, the process and rates may be different.
Importantly, there are some changes to business rates coming in April 2026, so it’s important to know how your business may be affected.
So, if you’re a business wondering how to calculate your business rates from April 2026, look no further, we lay it all out for you.
What Are Business Rates?
Let’s start with the basics – what actually are business rates?
Business rates are a type of tax charged on properties that are commercial or non-domestic, like shops, warehouses, restaurants and factories. The tax is paid by the occupier of the property (not the owner) to the council, so think of it like a council tax for business buildings.
The amount a business pays is based on the estimated rental value of the property, alongside a government multiplier.
These taxes are then paid to the council and used to fund services in the area.
How Do I Know If I Need To Pay Business Rates?
Any property that is non-domestic and used for business is usually liable to pay business rates.
This applies to restaurants, pubs, warehouses, factories, gyms, cinemas and other leisure or hospitality venues.
However, some properties are exempt from business rates. If your business is agricultural, religious or provides training or welfare for disabled people, you might be exempt. However, it’s always worth checking with the local council to be sure.
What Is Changing In April 2026?
One of the reasons business rates have been in the news so much recently is because they are being reset in April.
There are 3 main changes coming into play:
1. All business properties will get a new rateable value, as the last valuation was back in 2021.
2. The current list of multipliers will be expanded to include 5 multipliers instead of 2.
3. New reliefs will come into place, providing support for small businesses that will have their costs rise steeply as a result of the new rates.
More from Guides
How Are Business Rates Calculated?
Business rates are calculated using 2 key metrics:
1. The rateable value: A property valuation set up by the Valuation Office Agency (VOA).
2. The multiplier – set by the government each tax year.
The council applies the multiplier to the rateable value of the business property and subtracts any relief you might be entitled to. Then, a bill is sent to the business.
How To Calculate Your Business Rate
Here is how you can calculate your business rate, although it’s worth clarifying that only the final bill will be accurate.
If you do want to get an estimate however, here’s how you do it:
1. Find The Rateable Value Of Your Space
First, you’ll need to find your rateable value.
Click here to find your official valuation – all you need is the address.
2. Find Your Multiplier
This is where things become a little trickier, as the multipliers are changing in April 2026.
For the current 2025 – 26 tax year (ending March 2026), England has a two-tier system:
A small business multiplier: 49.9p for properties with a rateable value below £51,000
A standard multiplier: 55.5p for properties at £51,000 or above.
However, this is changing in April 2026.
From April, there are now 5 multipliers, as businesses classed as retail, hospitality and leisure (RHL) come under different rules, these are:
Non RHL businesses:
A small business multiplier: 43.2p for properties with a rateable value below £51,000
A standard multiplier: 48p for for properties with a rateable value between £51,000-£499,999.
High value multiplier: A new higher rate of 50.8p for buildings worth £500000 or over. (Mostly large distribution and warehouse properties)
RHL businesses:
A small business multiplier (RHL) 38.2p for retail, hospitality and leisure properties with a rateable value below £51,000.
A standard multiplier (RHL): 43p for retail, hospitality and leisure properties with a rateable value between £51,000-£499,999.
3. Multiply The Rateable Value By The Multiplier
This gives your annual business rates bill, before you claim any relief.
For example, say you have a dental practice worth £60,000.
- Rateable value: £60,000
- Multiplier: 48p (standard non RHL multiplier)
£60,000 × 0.48 = £28,800 per year.
But if you had a pub worth £60,000.
- Rateable value: £60,000
- Multiplier: 43p (standard RHL multiplier)
£60,000 × 0.43 = £25,800 per year.
4. Apply Any Relief
You may be able to claim relief, depending on your business and income.
Some discounts are automatically applied by the council, but others might need to be claimed by you.
Some reliefs that will apply to 26/27 business rates are transitional relief, small business relief and a new EV charging point relief.
Previously, RHL businesses were eligible for a 40% discount, but this has now been replaced by lower multipliers.
What If You Think Your Rateable Value Is Wrong?
The good news is that if you look at your rateable value and think it’s too high, you are allowed to challenge it. Any current rates that need to be challenged have to be submitted before March 31st 2026.
If you think the current rate is right but find that your new rate is wrong in April 2026, you will need to challenge it then.
How To Pay Your Business Rates
Usually, your council will bill you in spring and will give you the choice of paying in one lump sum or in several instalments over the year.
You can pay online, over the phone or set up a Direct Debit. Some councils will offer other ways to pay, such as at your local bank. However, this varies by location.
Are Business Rates Able To Be Claimed As Expenses For Tax?
Yes! The good news is that business rates are an allowable expense for tax, and can be deducted from your profits to lower your taxable income.
This isn’t just limited to companies either, sole traders can also deduct business rates as a cost when they fill in their self assessment.
For companies, business rates count as an expense, allowing them to lower their corporation taxes.
If you get any relief however, you must only deduct the amount you pay, not the pre-relief amount.
Business Rates In 2026 And Beyond
As 2026 bring in new changes to how business rates are calculated, it’s important for businesses to stay on top of the numbers.
Firstly, check your rateable value and make sure you submit any challenges in time.
Then, understand which multiplier applies to your business and apply for any relief well ahead of time.
Finally, as the new rates come into play, many businesses will see their bills go up. It’s important to stay proactive and budget for increases, or challenge them as you go.
Whilst it might all sound very confusing, the good news is that once you have the information to hand, calculating it is relatively simple. And the more you know now, the fewer nasty surprises you might get later.
