Reducing Your Business Rates: A Complete UK Guide

Most businesses pay more in business rates than they need to. You can legitimately reduce your bill in four main ways: check your rateable value is correct, claim every relief you are entitled to, make sure the right multiplier is applied, and challenge an over-valuation through the official process. None of this is avoidance — it is simply ensuring the figures HMRC’s local councils use are accurate and that you receive the discounts the law provides. With 2026 bringing both a revaluation and new multipliers, this is an especially good moment to review your bill line by line. This guide walks through each lever in order, with the 2026/27 figures, so you can work out exactly where your savings are.

How business rates are calculated

Your bill starts from a simple sum: rateable value × multiplier = annual charge, before reliefs. The rateable value is set by the Valuation Office Agency and broadly reflects the property’s open-market annual rent at a valuation date. The multiplier is a figure in pence in the pound set nationally each year. Reliefs are then applied to reduce the charge. That means there are only three things that can be wrong or improvable on your bill: the rateable value, the multiplier, and the reliefs. Reducing your rates is the disciplined process of checking each of the three — and most businesses find a saving in at least one.

The 2026/27 multipliers

From 1 April 2026 there are five national multipliers. Confirming which one applies to your property is essential, because using the wrong one costs you up to 5p in the pound on your whole rateable value.

Step 1: Check your rateable value

This is the foundation, and the most overlooked saving. Your rateable value is published on the Valuation Office Agency’s online service, and you should check it for accuracy: is the floor area right, are the property’s features correctly recorded, and is the value in line with similar nearby properties? Because 2026 is a revaluation year, new rateable values took effect on 1 April 2026, so the figure may have changed — up or down — regardless of the multiplier changes. An incorrect rateable value overcharges you every single year until the next revaluation, so getting it right is the highest-leverage thing you can do. If it looks too high, that leads to the Check, Challenge, Appeal process covered below.

Step 2: Claim Small Business Rate Relief

Small Business Rate Relief (SBRR) is the most valuable relief for small premises and is frequently the difference between a bill and no bill at all. If your property’s rateable value is £12,000 or less, you generally pay nothing. Between £12,001 and £15,000 the relief tapers from 100% down to 0%. SBRR generally applies where you occupy only one property, with limited exceptions for additional small properties. Many small shops, cafés and offices are entitled to SBRR and simply have not claimed it, or stopped receiving it after a change. Always check this first — for a large share of small businesses it removes the bill entirely, making every other step unnecessary.

Step 3: Make sure the right multiplier is applied

If your property is used wholly or mainly for retail, hospitality or leisure — a shop, pub, restaurant, café, hotel, gym, cinema and similar — it should be charged at the lower RHL multiplier (38.2p or 43p for 2026/27) rather than the standard one, provided its rateable value is under £500,000. This is a permanent reduction worth 5p in the pound, and councils do not always apply it correctly, particularly for mixed-use or borderline properties. Check your bill states the RHL multiplier if you qualify. Our guide to retail, hospitality and leisure business rates explains exactly who qualifies and how much the lower multiplier saves.

Step 4: Claim every other relief you qualify for

Beyond SBRR and the RHL multiplier, several reliefs are routinely missed:

Some reliefs are applied automatically and others must be claimed from your local council, so it is worth asking which you are receiving and which you might be entitled to. Reliefs interact, so the order in which they apply can matter — a quick review across all of them is where overlooked savings are usually found.

Step 5: Challenge your rateable value (Check, Challenge, Appeal)

If, after checking, you believe your rateable value is too high, you can dispute it through the Valuation Office Agency’s three-stage process. Check confirms the factual details about your property are correct — floor area, use, features. Challenge lets you argue the valuation itself is wrong, supported by evidence such as rents on comparable properties. Appeal escalates to the independent Valuation Tribunal if you cannot reach agreement. Because your bill is rateable value multiplied by the multiplier, a successful reduction lowers your bill every year until the next revaluation, and can sometimes be backdated — so it can be very valuable. The process takes time and evidence, which is why many businesses use a reputable rating specialist for anything beyond a simple correction.

Empty and part-occupied property

If part of your property is genuinely unused, or the whole property becomes empty, there are specific reliefs and strategies. Newly empty property generally gets a rates-free period (commonly three months, or six for industrial property) before empty-property rates apply, and certain properties are exempt for longer. Where only part of a property is occupied, you may be able to apply for relief on the empty part in some circumstances. These are technical areas with anti-avoidance rules, so they need careful handling — but for businesses with surplus or transitional space, they can produce real savings. Always tell the council promptly about changes in occupation, because reliefs often run from when you notify them.

Reliefs at a glance

The reliefs above stack and interact differently, but here is the quick picture of the most valuable for a typical small or mid-sized business:

Worked example: stacking the savings

A growing café group has one site with a rateable value of £45,000. First, because it is an eligible RHL property under £51,000, the RHL small multiplier of 38.2p applies instead of 43.2p — saving 5p in the pound, or £2,250 a year. Next, on reviewing the rateable value after the 2026 revaluation, the owner believes the floor area is overstated; a successful Check, Challenge, Appeal reduces the rateable value to £40,000, cutting the bill further and for every future year. Between the correct multiplier and the corrected valuation, the annual saving runs into thousands — none of it avoidance, all of it simply paying the right amount. This is the typical pattern: the biggest reductions come from combining the right multiplier, the right reliefs and an accurate rateable value.

Beware rogue rates agents

The business-rates world attracts unsolicited “rating agents” who cold-call promising guaranteed reductions for upfront fees or a large cut of any saving. Some are reputable specialists; others sign businesses up to unfavourable contracts, submit weak challenges, or charge for relief the business would have received anyway. Be cautious: never pay large upfront fees on a guarantee, check any agent’s track record and the contract terms, and remember you can check your rateable value and claim most reliefs yourself for free. For genuine, complex valuation disputes a qualified rating surveyor is worth using — but choose them deliberately, not because they called you.

Common mistakes to avoid

• Never checking the rateable value. An error overcharges you every year until the next revaluation.
• Not claiming Small Business Rate Relief. Under £12,000 rateable value usually means no bill.
• Paying the standard multiplier when RHL applies. That is 5p in the pound on the whole rateable value.
• Missing other reliefs. Rural, charitable, empty-property and transitional reliefs go unclaimed.
• Assuming the 2026 bill is right. A revaluation plus new multipliers means it should be checked.
• Signing up to a cold-calling rates agent. Check credentials and contracts before paying anything.

Why so many businesses overpay

Business rates are issued automatically by the local council based on the rateable value and the reliefs the council happens to have on record. There is no one whose job it is to make sure you are getting every saving you are entitled to — that responsibility falls on you. As a result, overpayment is common and usually comes from one of a few causes: a rateable value that is too high or based on outdated property details; a relief that was never claimed or quietly dropped after a change of occupier or use; the standard multiplier being applied where the lower RHL multiplier should be; or simply never reviewing the bill from one year to the next. Because each of these repeats annually, a single unnoticed error can cost a business thousands over a few years. The fix is a deliberate, regular review — and 2026, with its revaluation and new multipliers, is the ideal year to do it.

A simple annual review routine

Reducing your rates is not a one-off; it is a habit. A practical yearly routine looks like this:

• Pull your latest bill and note the rateable value, the multiplier used, and the reliefs applied.
• Check the rateable value on the Valuation Office Agency service and confirm the property details are correct.
• Confirm the multiplier — RHL if you are a qualifying retail, hospitality or leisure property.
• Tick off the reliefs — Small Business Rate Relief first, then any rural, charitable, empty-property or transitional relief.
• Flag any change — empty space, change of use, new occupation — to the council promptly.
• Decide on a challenge if the rateable value looks too high, while it is still within time.

Fifteen minutes a year on this routine is often the best-paid quarter-hour in the business, because every error you catch saves money for as long as the property is held.

Business rates and your lease: who actually pays?

One point that catches commercial tenants out is that, in most commercial leases, the tenant pays the business rates directly to the council, not the landlord — even though the rates relate to the property the landlord owns. That means if you are a tenant, reducing your business rates is your job and your saving, and you should not assume the landlord is checking anything on your behalf. It also means that when you take a new lease, the rateable value and likely rates bill are part of your real occupation cost and should be factored in alongside the rent. If your lease is silent or unusual on rates, check exactly who is responsible before you sign. For tenants, the practical message is simple: the rates bill is yours to manage, so the savings in this guide are yours to claim.

What happens after a successful reduction

If you correct your rateable value or secure a relief, the effect is not a one-off rebate — it changes your bill going forward and, where a challenge succeeds, can be backdated to produce a refund for the period you overpaid. The council reissues your bill at the lower figure, and the saving then repeats automatically each year until the next revaluation resets rateable values. That is why getting it right is so valuable: a £3,000 annual reduction is really £3,000 every year for the life of the valuation, plus any backdated refund. It is also why it pays to act promptly around a revaluation — the sooner an error is corrected, the more years you benefit, and challenges must be brought within the relevant time limits. Treat a successful reduction as a recurring saving, not a single win.

When to get advice

For a simple, single-property business, checking your rateable value and confirming your reliefs is something you can do yourself for free. Advice becomes worthwhile when the position is more complex: multiple properties, mixed use, a borderline RHL classification, a significant revaluation increase, empty or part-occupied space, or a valuation you want to challenge with evidence. In those cases a short review can pay for itself many times over, because the saving repeats every year. The key is to act around the 2026 revaluation, while the figures are fresh and any challenge is within time.

London businesses: a quick note

London’s high rateable values make getting business rates right particularly worthwhile — and particularly easy to get wrong. More London properties sit above the £51,000 and £500,000 thresholds, where the multiplier that applies makes a large difference, and revaluation movements can be significant. For London operators, checking the rateable value and the applied multiplier carefully after the 2026 revaluation, and considering a challenge where the valuation looks high, can produce savings that recur every year.

What we see in practice

There are really only two levers for cutting a rates bill: get the rateable value right, and claim every relief you qualify for. The rateable value is challenged through the Valuation Office Agency’s Check, Challenge, Appeal process, and you generally have to complete the Check stage — confirming the facts the VOA holds about the property — before you can formally Challenge the valuation. Most overpayment we see comes from a wrong floor area or an outdated description sitting unchallenged on the list.

On reliefs, the common error is assuming they stack automatically. Small business rate relief, charitable relief and the retail multipliers each have their own tests and, in some cases, their own application; a property can qualify and still be billed in full simply because nobody claimed. Before the 2026 revaluation figures settle, we audit both the rateable value and the relief position together, because fixing only one usually leaves money on the table.

How Hayhills can help

Reviewing your business-rates position is a commercial matter, not a reserved legal activity, so Hayhills can help you directly: checking that the correct 2026/27 multiplier and any RHL status are applied, reviewing your eligibility across every relief (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 surveyor. Explore our business advisory service or speak to Hayhills today. Also see our guide to retail, hospitality and leisure business rates if you run that kind of business.

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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