Under the new system, announced by the Treasury earlier this year, two lower multipliers will apply to qualifying properties in England with rateable values (RVs) below £500,000:
- A Small Business RHL Multiplier for premises under £51,000 RV
- A Standard RHL Multiplier for properties between £51,000 and £499,999 RV
The reform represents the first permanent structural reduction in business rates for shops, pubs, cafés, restaurants, hotels and other hospitality and leisure venues. It replaces the temporary discretionary reliefs that have been renewed annually since 2020, following UKHospitality’s earlier calls for stronger more permanent reform.
Crucially, the new regime removes the previous £110,000 cash cap, meaning all eligible sites within multi-site groups will benefit from the lower multiplier, provided they meet the statutory definition.
Eligibility will now be determined according to The Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025 (SI 2025/1093), which replace local authority discretion with national consistency. The criteria broadly mirror the existing 40% RHL relief scheme but are now set in law rather than applied by councils.
The Government has confirmed the new multipliers will apply only to occupied hereditaments used “wholly or mainly” for in-person retail, hospitality or leisure activity delivered to visiting members of the public.
‘Major boost’
Global tax firm Ryan’s practice leader of Europe & Asia-Pacific property tax, Alex Probyn, said: “With the cash cap of £110,000 in relief removed this is a major boost for multi-site operators. But many will now be anxiously waiting to see whether their larger stores and venues over £500,000 in rateable value, which are excluded from the lower tax rates, will attract the new supplement to standard rates. Across the retail, hospitality and leisure sectors, up to 4,353 premises could be caught by the supplement - facing an estimated £482 million a year extra in business rates.
“Whilst gains from lower bills from the new lower RHL multipliers also risk being clawed back in part through higher bills on warehouses, distribution centres and corporate HQs - many of which are expected to face not only the supplement but sharp increases under the revaluation, creating a potential double hit.
“For single-site and independent operators, the reduction in the multiplier will be broadly in line with existing discounts - offering stability rather than a step-change, but still far below the 75% relief in the previous financial year.”
The announcement follows mixed industry reaction from pub operators and trade bodies, many of whom argue that wider tax reform is still needed.
Final multiplier rates and any supplements will be announced at the Autumn Budget 2025, following completion of the 2026 revaluation.
