Commercial property owners have been living with new business rates bills since 1 April 2026, when the latest rating list took effect. For anyone who hasn't looked closely at how the new multiplier structure and transitional relief actually interact, the figure on the bill can be a surprise in either direction — and the reasons why are worth understanding before you decide whether it's worth challenging.
What changed on 1 April 2026
The 2026 list replaced the 2023 one, with every rateable value in England reset to reflect the property market at the antecedent valuation date of 1 April 2024 — two years before the list itself began, which is the usual gap for an English revaluation. The Non-Domestic Rating Act 2023 also shortened the cycle going forward: revaluations now run on a three-yearly basis rather than the five-yearly gap that used to apply, so the next reset is due in 2029, not 2031. The same Act put ratepayers under an ongoing duty to keep the Valuation Office Agency informed about changes to their property, rather than everything being caught up at the next scheduled revaluation.
A genuinely different multiplier for retail, hospitality and leisure
The 2023 Act gave government the power to set different multipliers by property type and value band for the first time, and from the 2026-27 rating year that power has been used properly. A permanently lower multiplier now applies to qualifying retail, hospitality and leisure properties with a rateable value under £500,000, replacing the old temporary discretionary relief scheme that had to be renewed and re-capped every year. It's funded by a higher multiplier on properties valued at £500,000 or more — a threshold that isn't limited to retail, hospitality and leisure at all. Large commercial and industrial premises well outside those sectors, the kind many developers build to hold or let, can find themselves paying the higher rate purely on rateable value, and that's a real ongoing cost to build into acquisition and development appraisals rather than a one-off adjustment to absorb.
Transitional relief: why your bill may not match your new rateable value yet
Where a rateable value rose sharply, transitional relief phases the increase in over several years rather than applying it in one jump, so a bill that looks lower than the new rateable value alone would suggest is often transitional relief doing its job rather than an error. The other side of that used to cut the other way too: previous revaluations phased in falls as well as rises, so a lower rateable value didn't always mean an immediately lower bill. Downward transitional relief was scrapped from the 2023 list, and that change carries through into the 2026 cycle, so a genuine fall in your rateable value should flow through to your bill from 1 April 2026 rather than being held back. If your rateable value has come down and your bill hasn't followed, it's worth checking rather than assuming the system has applied it correctly.
Empty and part-occupied commercial property
Empty property rates relief rules haven't changed — broadly, full liability still kicks in after three months empty for most commercial premises and six months for qualifying industrial property — but the relief and the eventual charge are both calculated against rateable value. A revaluation that pushes RV up on a property sitting empty between tenants, or through a refurbishment programme, increases the cost of that void meaningfully, and it's worth re-running the numbers on any holding period you'd budgeted before the revaluation landed. We've written in more detail on the mechanics of empty property business rates and the interaction with council tax on residential-adjacent sites in a separate article.
Challenging your rateable value
The route to a lower figure is the Valuation Office Agency's Check, Challenge, Appeal service. You start with a Check, which confirms the factual details your valuation is based on — floor areas, use, physical characteristics — and gives you the chance to correct anything that's wrong before an argument about value even begins. If the figure is still wrong once the facts are right, you move to a Challenge, setting out the case for a different rateable value, and an unresolved Challenge can be escalated to the Valuation Tribunal. Each stage runs to its own strict time limit measured from the previous decision, so a rateable value you think is wrong is worth raising promptly rather than left until closer to the next revaluation.
What this means for development timing
Rates liability on a new or substantially altered commercial building doesn't start the moment construction finishes; it starts from the property's completion day, which is either reached naturally once the building is capable of occupation or fixed by a completion notice served by the local authority. That date decides which rating list, and which multiplier band, a scheme falls into from its very first day of liability. Where the timing of practical completion is genuinely flexible on a scheme sitting close to the £500,000 rateable value threshold, or close to a list boundary, it's worth factoring the rating position into the decision alongside the usual commercial drivers rather than treating it as an afterthought once the certificate is signed.
Common questions
When did the new rating list take effect and what valuation date does it use?
The 2026 rating list took effect on 1 April 2026, with rateable values set at the antecedent valuation date of 1 April 2024 — two years before the list begins, in line with the usual pattern for English business rates revaluations.
Will my rates bill definitely fall if my rateable value has gone down?
Not necessarily overnight, though it should flow through faster than in some earlier revaluations. Downward transitional relief, which used to slow the pace at which falling bills came down, was scrapped from the 2023 rating list, so a lower rateable value should generally be reflected in your bill from 1 April 2026 rather than phased in over several years. It's still worth checking your bill against your new rateable value rather than assuming the reduction has been applied correctly.
Does the revaluation change how empty property rates work?
The empty property rules themselves haven't changed, but because they're calculated against your rateable value, a revaluation that raises the RV on a property you're holding empty between tenants or during a refurbishment increases the cost of the void, sometimes considerably.
How do I challenge a rateable value I think is wrong?
Through the Valuation Office Agency's Check, Challenge, Appeal service. You start with a Check, confirming the factual details the valuation is based on, then move to a Challenge if you want to argue for a different figure, and can escalate an unresolved case to the Valuation Tribunal. Each stage runs to its own strict time limit, so it's worth raising a value you think is wrong sooner rather than later.
Is the higher multiplier only for retail, hospitality and leisure properties?
No. The lower multiplier introduced from 2026-27 is targeted at qualifying retail, hospitality and leisure properties with a rateable value under £500,000, but the higher multiplier that funds it applies to any property, regardless of sector, with a rateable value of £500,000 or more. Large commercial and industrial premises well outside retail, hospitality and leisure can be caught by the higher rate.
Kieran Holsgrove is a Director and Co-Founder of Grafene Accounting, the property tax specialist firm based in Liverpool. He advises property developers, investors and landlords across Merseyside, Greater Manchester, Lancashire and Cheshire on tax structuring, developer VAT, SDLT and the long-view decisions that compound over the life of a portfolio.
This article is general information, not personal tax or legal advice, and the rules referred to can change. Your own position depends on facts we cannot see from here — please take advice before acting on anything above.