For London’s shopkeepers, publicans and restaurateurs, business rates are one of the largest fixed costs, and they changed in April 2026. A new system of five multipliers replaced the temporary relief that retail, hospitality and leisure businesses had relied on since the pandemic, and every non-domestic property in England was revalued at the same time. If you run a shop, pub, restaurant or gym in London, the result depends heavily on what your premises are worth on paper and how the government classifies your business.
This guide explains what changed, who gains and who pays more, how the transitional arrangements soften the impact, and what is worth checking on your own bill. It draws on government guidance and a London borough’s published explanation rather than anyone’s forecast.
In short
- From 1 April 2026, a revaluation took effect alongside a new structure of five business rates multipliers.
- Retail, hospitality and leisure (RHL) properties with a rateable value below £500,000 now pay lower multipliers, 38.2p or 43p in the pound, depending on size.
- The temporary 40% RHL relief, capped at £110,000 per business, ended on 31 March 2026.
- Properties with a rateable value of £500,000 or more pay a higher multiplier of 50.8p.
- Transitional relief limits how fast bills can rise because of the revaluation. London has its own, higher size thresholds.
- Your rateable value is not your bill. Your local council calculates the bill.
What changed on 1 April 2026?
Two things happened at once, which is why the changes can be confusing.
The first was the 2026 revaluation. The Valuation Office Agency updates rateable values every three years to redistribute the amount paid in business rates across sectors and regions. The valuation date for the 2026 list was 1 April 2024, so the new values reflect market conditions at that point rather than at today’s date. New rateable values took effect on 1 April 2026.
The second was a new multiplier structure. A multiplier is the amount, in pence, charged for every pound of rateable value. Until March 2026 there were effectively two, a small business multiplier and a standard one. From April 2026 there are five, split by property use and by rateable value.
The change replaces something temporary with something permanent. During the pandemic and after, many shops, pubs and restaurants received a temporary relief on their rates. For 2025/26 that was 40% off, capped at £110,000 per business. The government’s own assessment describes the problem with that approach as an “annual cliff-edge” of uncertainty, because businesses never knew from one year to the next whether the relief would continue. The relief ended on 31 March 2026 and was replaced by permanently lower multipliers for the same kinds of property.
The five multipliers at a glance
| Multiplier | Applies to | Rate (per £1 of rateable value) |
|---|---|---|
| Small business RHL | Retail, hospitality and leisure, rateable value under £51,000 | 38.2p |
| Standard RHL | Retail, hospitality and leisure, £51,000 to £499,999 | 43p |
| Small business (non-RHL) | Other properties, rateable value under £51,000 | 43.2p |
| Standard (non-RHL) | Other properties, £51,000 to £499,999 | 48p |
| High-value | All properties with a rateable value of £500,000 or more | 50.8p |
Source: GOV.UK, Effects of the business rates retail, hospitality and leisure multipliers and high-value multiplier, published 26 November 2025.
The government defines RHL properties as those in retail, hospitality and leisure uses with a rateable value below £500,000. The legislation specifies which properties qualify, and the government has published guidance to help councils and businesses interpret it. That detail matters. Whether a particular unit counts as RHL is not a matter of how you describe your business, but of how the property is classified in law.
A simple illustration of the difference
To see what the structure means in practice, it helps to multiply a rateable value by a multiplier. The figures below are illustrations only. They ignore reliefs, transitional arrangements and any local adjustments, and they are not a quote. Your council issues the actual bill.
- A shop with a rateable value of £40,000. At the small RHL multiplier of 38.2p, the starting figure is £15,280. At the non-RHL small multiplier of 43.2p, it would be £17,280, a difference of £2,000 a year.
- A restaurant with a rateable value of £120,000. At the standard RHL multiplier of 43p, the starting figure is £51,600. At the non-RHL standard multiplier of 48p, it would be £57,600.
- A large premises with a rateable value of £600,000. At the high-value multiplier of 50.8p, the starting figure is £304,800.
The gap between the RHL and non-RHL figures is the policy in miniature: the government has chosen to charge less for the kinds of premises that line high streets, and to charge more for the most valuable properties.
Who gains and who pays more?
The government’s assessment is candid that the system is designed to shift the burden. It says the lower RHL multipliers are funded in part by higher charges on premium properties.
On the winning side, the document counts more than 750,000 RHL properties, which it calls hereditaments, a legal term for a rated property. They include more than 35,000 pubs sharing an estimated £210 million reduction and nearly 30,000 restaurants sharing an estimated £180 million benefit over the period 2026/27 to 2028/29. Those are the government’s estimates, spread across England, and they are not guarantees for any individual business.
On the paying side, the largest properties contribute more. The same document says around 1,900 distribution warehouses will contribute an additional £270 million over three years, reflecting the high-value multiplier.
For London, the assessment counts 110,900 RHL properties and 7,500 high-value properties in the London region. That mix matters in the capital: by the government’s count, well over 100,000 London properties benefit from the lower RHL multipliers, while several thousand sit in the high-value band. Two premises on the same street can therefore be treated very differently, depending on their rateable value and how they are classified.
The document also notes that the 2026 revaluation reduces the national multipliers by between 6.7p and 7.5p. That is not, by itself, a cut in what any business pays: multipliers and rateable values are reset together, so the two need to be read side by side.
Transitional relief: easing the shock
A new revaluation can push some bills up sharply, particularly if a property’s value has risen faster than average. Transitional relief limits how much a bill can increase in a year because of the revaluation.
Merton Council, a London borough, publishes the caps for 2026/27. They depend on the size of the property, and London has higher thresholds than the rest of England:
| Property size | Rateable value (London) | Cap on bill increase, 2026/27 |
|---|---|---|
| Small | Up to £28,000 (£20,000 elsewhere) | 5% |
| Medium | £28,001 to £100,000 (£20,001 to £100,000 elsewhere) | 15% |
| Large | Over £100,000 | 30% |
The government’s document describes the transitional scheme as redesigned alongside the new multipliers, and says the supporting small business scheme has been expanded. It also says the retention period for Small Business Rates Relief has been extended from one year to three years. If your business is small, it is worth asking your council how these arrangements apply to you rather than assuming either way.
What to check on your own bill
The reforms are national, but the bill is local. A few practical checks can prevent expensive mistakes.
- Find your new rateable value. You can look up your property’s valuation using the “find a business rates valuation” service on GOV.UK, or through a business rates valuation account. Remember that your rateable value is not what you pay. Your local council uses it to calculate the bill.
- Check the property details. The Valuation Office relies on facts such as floor area and use. If those are wrong, the valuation can be wrong. The “check” case process lets you notify the Valuation Office of incorrect property details.
- Confirm how your property is classified. Whether it is treated as RHL, non-RHL or high-value determines which multiplier applies. If you think the classification is wrong, raise it.
- Look at which reliefs and caps apply. The old temporary RHL relief no longer exists. Ask your council what transitional relief and small business reliefs are being applied to your bill.
- Consider help. Property owners can appoint an agent to manage their business rates account and speak to the Valuation Office on their behalf, although you should weigh any fees against the potential saving.
What this means for the street
It is too early to judge the long-term effect of the change on London’s high streets, and anyone claiming certainty should be treated cautiously. What can be said is that the permanent multipliers remove a recurring source of uncertainty: operators no longer have to wonder each spring whether a temporary relief will be extended. That matters for planning. Our coverage of the new high street and how London’s retail areas are being reinvented and of why independent shops still matter to London’s retail economy explores how much of the capital’s retail character depends on small operators who feel fixed costs most keenly.
For small firms, the change fits a wider lesson from our look at what small businesses need to get right in London’s market: the businesses that cope best tend to understand their cost base line by line, including the costs that arrive as a statutory bill rather than a supplier invoice.
Frequently asked questions
Are business rates lower for every shop in London?
No. Retail, hospitality and leisure properties with a rateable value below £500,000 pay the lower RHL multipliers. Other property types pay the non-RHL multipliers, and properties with a rateable value of £500,000 or more pay the high-value multiplier of 50.8p. The result for a given business also depends on its rateable value and any reliefs.
Is my rateable value the same as my bill?
No. Your rateable value is an assessment of the property. Your local council applies a multiplier to it, along with any reliefs, to calculate the bill.
When was the valuation date for the 2026 revaluation?
The valuation date was 1 April 2024. New rateable values took effect on 1 April 2026.
Can I challenge my valuation?
Yes. The Valuation Office process begins with a “check” case to confirm or correct the factual details held about your property. The GOV.UK guidance on the 2026 revaluation explains the steps.
The bottom line
The 2026 changes replace a temporary relief with permanent, lower multipliers for many London shops, pubs and restaurants, and ask the most valuable properties to pay more. Whether a particular business is better off depends on its rateable value, its classification and the reliefs it receives. The most useful step is also the simplest: look up your valuation, check that the details are right, and ask your council exactly how your bill has been calculated.
This article is general information about business rates policy in England, not tax or professional advice. Figures are taken from the sources below and may change; confirm your own position with your local council or a qualified adviser.
Sources: GOV.UK — Effects of the business rates retail, hospitality and leisure multipliers and high-value multiplier; GOV.UK — Help with the 2026 business rates revaluation; Merton Council — Revaluation and transitional relief.
