The ONS confirmed today (22 October) that the Consumer Prices Index (CPI) stood at 3.8% in September 2025.
Each September’s CPI figure determines the overall increase in the business rates yield for the following financial year, even in a revaluation year, effectively locking in the rise for April 2026.
It follows last year’s September inflation figure, which UKHospitality warned would trigger a £48m increase in business rates for pubs in 2025.
More than £1bn
Analysis by global tax firm Ryan estimates the latest figure will push total non-domestic property tax liabilities in England up by more than £1bn.
From April 2026, a nationwide revaluation will reset Rateable Values (RVs) to reflect property rental values as of 1 April 2024. Although revaluations are intended to be revenue-neutral overall, inflation continues to drive up the total tax take nationally.
Business rates are devolved to Scotland, Wales and Northern Ireland, meaning today’s announcement applies only to England.
‘Double hit’
Ryan’s practice leader of property tax, Europe and Asia-Pacific, Alex Probyn, warned that the combination of inflation and new tax supplements would put further pressure on larger operators.
“September’s inflation figure locks in a £1.06bn increase in the business rates yield in England for next year,” he said.
“The UK already has the highest property taxes in the developed world — 3.7% of GDP compared to just 1.4% across the EU. For large occupiers this is a double hit: inflation increasing the yield and a new 10p supplement on large properties. That combination risks undermining competitiveness at a critical moment for the economy.”
The rise comes just months after the Government confirmed details of the new Retail, Hospitality and Leisure (RHL) business rates multipliers, due to take effect alongside the 2026 revaluation.
Industry bodies including UKHospitality have repeatedly called for meaningful reform to what chief executive Kate Nicholls described as a “completely broken system.”
Cross-party MPs have also urged ministers to deliver a 20p cut in both business rates multipliers and overhaul National Insurance contributions to support investment across the pub and brewing sector.
