What Is Retail, Hospitality and Leisure Relief? A Plain-English Guide for UK Businesses

If you run a shop, pub, restaurant, café, hotel, gym or similar business, the way you get a business-rates discount has fundamentally changed for 2026. The temporary Retail, Hospitality and Leisure (RHL) relief scheme — the 40% bill discount many businesses relied on — ended on 31 March 2026. From 1 April 2026 it has been replaced by two permanently lower business-rates multipliers for eligible RHL properties with a rateable value under £500,000. In plain terms, instead of claiming a yearly relief, qualifying RHL properties now simply pay a lower rate built into the system — a permanent tax cut worth nearly £1 billion a year across more than 750,000 properties. This guide explains exactly how the new multipliers work, who qualifies, how much you save (with worked examples), what other reliefs still apply, and how to make sure you are not overpaying.

What RHL relief was

Business rates are the tax on non-domestic property — shops, offices, pubs, factories and the like. To support high streets through a difficult period, the Government ran a temporary Retail, Hospitality and Leisure relief scheme that knocked a percentage off eligible bills each year. In 2025/26 that relief was 40% off a qualifying property’s bill, capped at £110,000 per business across all its properties. It had to be applied for (or applied by the local council) each year and was always temporary, renewed budget by budget. Because it was a discount layered on top of the normal bill, it created uncertainty: businesses never knew, year to year, whether or at what level the relief would continue.

The big 2026 change: relief replaced by lower multipliers

From 1 April 2026, the temporary relief scheme is gone. In its place, the Government has introduced two permanently lower multipliers for eligible retail, hospitality and leisure properties with a rateable value below £500,000. Rather than receiving a discount on the bill, those properties now have a lower rate baked into the calculation itself. The new RHL multipliers are set 5p lower than their standard equivalents, and the cut is funded by a new, higher multiplier on the most valuable properties (rateable value £500,000 and above). The Government describes this as a permanent tax cut worth nearly £1 billion a year, benefitting over 750,000 RHL properties. The headline practical effect: smaller and mid-sized retail, hospitality and leisure businesses pay less, permanently, while the largest properties pay more.

The 2026/27 business-rates multipliers

From 1 April 2026 there are five national multipliers. The multiplier is the figure (pence in the pound) you multiply your rateable value by to get your annual bill before any reliefs.

So an eligible RHL property pays 5p in the pound less than an equivalent non-RHL property — provided its rateable value is under £500,000. At £500,000 and above, the high-value multiplier of 50.8p applies instead, and there is no RHL discount; those large properties effectively fund the cut for everyone else.

How business rates are calculated

The basic calculation is simple: rateable value × multiplier = annual bill (before reliefs). The rateable value is set by the Valuation Office Agency and broadly reflects the property’s open-market annual rent at a set valuation date. So a café with a rateable value of £30,000, as an eligible RHL property under £51,000, would be charged at the RHL small multiplier of 38.2p: £30,000 × 0.382 = £11,460 a year. The same property, if it were not RHL-eligible, would be charged at 43.2p: £30,000 × 0.432 = £12,960 — so RHL status saves it £1,500 a year, automatically. Understanding which multiplier applies to your property is therefore the single most important thing in getting your bill right.

The 2026 revaluation

2026 is also a revaluation year. Business rates are periodically revalued so that rateable values reflect more recent rental evidence, and new rateable values take effect from 1 April 2026. This matters because your bill depends on both the multiplier and your rateable value, and a revaluation can move your rateable value up or down regardless of the multiplier changes. Some businesses will see their rateable value rise, others fall. The combination of a new rateable value and the new multipliers means every RHL business should check its 2026 bill carefully rather than assuming it simply went down — the relief change helps, but a higher revaluation could partly offset it. Transitional arrangements may phase in large increases.

Who qualifies as retail, hospitality or leisure?

The RHL multipliers are for properties “wholly or mainly used” for qualifying retail, hospitality or leisure purposes. Broadly, qualifying uses include:

Properties not generally used by visiting members of the public — such as most offices, professional services, financial premises, factories and warehouses — do not qualify and pay the standard multipliers. The exact list and definitions are set out in Government guidance, and borderline cases (mixed use, for example) are worth checking, because the difference is 5p in the pound on every pound of rateable value.

How much you save: worked examples

The saving depends entirely on your rateable value and whether you qualify. Three illustrations using the 2026/27 multipliers:

The pattern is clear: small and mid-sized RHL businesses gain a permanent reduction, while the largest properties pay the high-value multiplier and fund the cut. A very small business may also pay nothing at all once Small Business Rate Relief is applied — covered next.

Small Business Rate Relief (still available)

Separately from the RHL multipliers, Small Business Rate Relief (SBRR) continues to apply and is often even more valuable for the smallest premises. If your property’s rateable value is £12,000 or less, you generally pay no business rates at all. Between £12,001 and £15,000, the relief tapers down from 100% to 0%. SBRR generally applies where you occupy only one property (with limited exceptions for additional small properties). Crucially, a very small RHL business benefits from SBRR first — meaning the multiplier change matters most for properties above the SBRR threshold. Always check SBRR before anything else, because for many small shops and cafés it wipes the bill out entirely.

Other reliefs that may apply

Beyond RHL multipliers and SBRR, several other reliefs can reduce a bill, and businesses frequently miss them:

• Rural rate relief for certain businesses in designated rural areas, such as the only shop or pub in a small village.
• Charitable rate relief of up to 80% (with discretionary top-up) for registered charities and community amateur sports clubs.
• Empty property relief, giving a short rates-free period when a property becomes empty.
• Transitional relief, which phases in large changes following a revaluation so increases do not all hit at once.
• Discretionary and hardship relief, which local councils can grant in specific circumstances.

Reliefs can stack in some cases and not in others, so the order in which they apply matters. Reviewing your eligibility across all of them is where real savings are often found.

Old relief vs new multipliers: are you better or worse off?

Whether the change helps or hurts a particular business depends on its size and rateable value, so it is worth comparing the two systems directly. Under the old 2025/26 system, a qualifying RHL property got 40% off its bill, but the saving was capped at £110,000 per business — so large operators with many sites hit the cap and lost relief on everything above it. Under the new 2026/27 system, the saving comes as a 5p-lower multiplier with no per-business cap, but only for properties under £500,000 rateable value, and properties at or above that pay a higher rate. The result: many small and mid-sized single-site RHL businesses are better off or similar, multi-site operators previously limited by the £110,000 cap may gain because the cap is gone, and the very largest individual properties are worse off under the high-value multiplier. The old system was a temporary, capped discount; the new one is a permanent, uncapped lower rate that deliberately shifts the burden towards the biggest premises.

What it means for different business types

The practical impact varies by sector and size. A small independent café or shop with a rateable value under £12,000 likely pays nothing because of Small Business Rate Relief, so the multiplier change is academic for them. A growing restaurant or gym with a rateable value between £51,000 and £500,000 is a clear winner — the 43p RHL multiplier saves 5p in the pound with no cap. A multi-site hospitality group that previously lost relief to the £110,000 cap may now save more overall, because the lower multiplier has no such limit. A flagship department store or large venue over £500,000 rateable value is the loser, paying the 50.8p high-value multiplier. And a professional office or warehouse never qualified for RHL and pays the standard 43.2p or 48p as before. Knowing which of these you are is the first step to checking your bill is right.

How to reduce your business rates legitimately

There are several lawful ways to make sure you pay no more than you should:

• Confirm your RHL status is correctly applied, so you get the lower multiplier you are entitled to.
• Claim Small Business Rate Relief if your rateable value is £15,000 or under and you occupy one property.
• Check every other relief — rural, charitable, empty-property and transitional — for which you may qualify.
• Review your rateable value after the 2026 revaluation, and use Check, Challenge, Appeal if it looks too high.
• Tell the council promptly about changes — empty periods, changes of use, splits or mergers of premises — that affect your bill.
• Use a reputable rating adviser for complex cases, and avoid anyone promising guaranteed cuts for upfront fees.

None of this is avoidance — it is simply making sure the correct multiplier, rateable value and reliefs are applied. For many RHL businesses, a careful annual review pays for itself many times over.

How to check and claim

Your business-rates bill comes from your local council, and most reliefs are either applied automatically or claimed through the council. Practical steps: check your rateable value on the Valuation Office Agency’s online service; confirm which multiplier your bill uses and whether RHL status has been correctly applied; make sure you are receiving any Small Business Rate Relief you are entitled to; and contact your council if anything looks wrong. Because 2026 brings both new multipliers and a revaluation, it is especially worth checking your first bill of the new year line by line rather than assuming the figures are right.

Challenging your rateable value

If you believe your rateable value is too high, you can challenge it through the Valuation Office Agency’s Check, Challenge, Appeal process. “Check” confirms the facts about your property are correct; “Challenge” lets you argue the valuation is wrong, with evidence; and “Appeal” escalates to an independent tribunal if you cannot agree. Because your bill is rateable value multiplied by the multiplier, a successful reduction in rateable value reduces your bill every year until the next revaluation — so it can be very valuable. Many businesses use a rating specialist for this; be wary of unsolicited “rates agents” who promise guaranteed reductions, and check anyone you instruct.

Common mistakes to avoid

• Assuming the old 40% relief still applies. It ended on 31 March 2026 and is replaced by lower multipliers.
• Not checking which multiplier your bill uses. A misapplied multiplier costs 5p in the pound on the whole rateable value.
• Ignoring the 2026 revaluation. A new rateable value can change your bill independently of the multiplier.
• Overlooking Small Business Rate Relief. Under £12,000 rateable value usually means no bill at all.
• Missing other reliefs. Rural, charitable, empty-property and transitional reliefs are commonly left unclaimed.
• Trusting unsolicited rates agents. Check anyone promising guaranteed reductions before paying fees.

London businesses: a quick note

London matters here because rateable values are high — many London shops, restaurants and leisure venues have rateable values well above the £51,000 threshold, and some of the largest premises will cross the £500,000 line into the high-value 50.8p multiplier, where no RHL discount applies. That makes the threshold effects especially significant for London RHL businesses: a mid-sized venue benefits from the 43p RHL multiplier, but a flagship store can find itself paying the highest rate. For London operators, checking exactly which multiplier applies — and whether a Check, Challenge, Appeal is worthwhile after the 2026 revaluation — is particularly important.

The direction of travel for business rates

The 2026 changes are part of a longer effort to rebalance business rates towards the high street and away from the largest, often online-driven, operators. By building a permanently lower rate for retail, hospitality and leisure into the system — and funding it with a higher multiplier on the most valuable properties — the Government has signalled that supporting bricks-and-mortar businesses is now a structural feature of the tax rather than a temporary giveaway renewed each budget. For business owners, the practical implication is stability: instead of waiting each autumn to learn whether a relief will be extended, eligible RHL properties now have a known, lower rate to plan around. It also means the rateable value itself — and getting it right through the revaluation and, where needed, a challenge — becomes the main lever you can actually influence. Watching for further reform, and reviewing your position at each revaluation, is now part of running a rates-efficient business.

What we see in practice

The question we field most from retail and hospitality clients is simply what happens when the relief ends. For 2025/26 the Retail, Hospitality and Leisure relief was cut to 40%, capped at £110,000 per business, and that temporary scheme ends on 31 March 2026. From 1 April 2026 it is replaced not by a discount but by permanently lower RHL business-rates multipliers built into the bill itself — a structural change rather than an annual top-up.

The practical catch we flag is the £500,000 threshold. The lower RHL multipliers only apply up to a rateable value of £499,999; properties at or above £500,000 fall into a new higher multiplier (50.8p for 2026/27) designed partly to fund the relief for smaller premises. For occupiers near that line, the 2026 revaluation figure on the Valuation Office Agency’s draft list is worth checking early, because a small movement in rateable value can change which multiplier applies.

How Hayhills can help

Business-rates strategy is a commercial matter, not a reserved legal activity, so Hayhills can help you directly: checking that the correct 2026/27 multiplier and RHL status have been applied to your bill, reviewing your eligibility across the full range of reliefs (RHL, Small Business Rate Relief, rural, charitable, empty-property and transitional), and helping you decide whether a rateable-value challenge is worth pursuing after the revaluation. Where a formal valuation tribunal appeal is needed, we work alongside and can introduce a regulated rating specialist. Explore our business advisory service or speak to Hayhills today. Keeping your company records straight helps too — see our Companies House filings guide.

This article is for general information only and does not constitute legal or accountancy advice. Hayhills Limited, trading as Hayhills Legal Advisory, provides non-reserved legal advisory services. Always check current requirements at GOV.UK.

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