Under the new system, announced at the Autumn Budget 2024, two permanent lower multipliers will apply to qualifying RHL properties in England with a rateable value (RV) below £500,000.
- Small Business RHL Multiplier – for premises with an RV under £51,000
- Standard RHL Multiplier – for those with an RV between £51,000 and £499,999
The new structure replaces the temporary RHL relief schemes renewed annually since 2020 and introduces a permanent reduction in business rates bills for qualifying sites. Final multiplier figures will be confirmed at the Autumn Budget 2025, following the Government’s earlier confirmation of the new multipliers for hospitality.
Statutory criteria
Eligibility will be defined in law rather than decided by local authorities, under the Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025 (SI 2025/1093). The new criteria broadly mirror the current 40% RHL relief scheme but put it on a statutory footing, offering greater consistency but removing local flexibility.
To qualify, a property must be occupied and used “wholly or mainly” for in-person retail, hospitality or leisure activity provided to “visiting members of the public”.
This includes pubs, bars, restaurants, cafés, hotels, guest houses and a wide range of leisure venues.
Excluded uses include financial and professional services, medical facilities, taxi or transport bases, and certain specialist operations such as betting shops and conference centres.
Unlike current reliefs, there will be no cash cap, meaning all eligible sites within a pub, bar, restaurant or hotel group will benefit, provided each individual property meets the criteria and value threshold.
Premises with an RV above £500,000 will not qualify for the new multipliers and are expected to face a supplementary charge of up to 10p in the pound from April 2026. According to independent analysis, this could impact around 4,300 high-value premises nationwide, potentially adding £480m a year in additional rates costs across retail, hospitality and leisure.
Earlier this month, chair of UKHospitality, Kate Nicholls, reiterated that “the business rates system is completely broken” and urged Government to “lower business rates, fix NICs and cut VAT” ahead of the November Budget.
The call aligns with recommendations from the All-Party Parliamentary Beer Group (APPBG), which yesterday urged ministers to deliver “meaningful business rates reform” and cut both multipliers by 20p to help pubs and brewers invest and grow.
What operators should do now
- Review rateable values: Check draft RVs when published later this year and confirm each site’s use aligns with the new RHL definitions
- Segment your estate: Identify sites under £51,000, £51,000–£499,999, and over £500,000 RV to model the likely impact
- Plan for change: The temporary 40% RHL relief with a £110,000 cap remains in place for 2025–26 before the new system starts
- Budget ahead: Consider how potential supplements on larger properties and higher valuations on non-RHL assets such as warehouses could affect total liabilities.
The 2026 Revaluation and new RHL multipliers take effect from 1 April 2026, subject to confirmation at the Autumn Budget 2025.
Industry leaders continue to warn that wider tax reform will still be essential for long-term sustainability, amid persistent inflation and operational cost pressures.
