Small Business Rates Relief UK: Eligibility, How to Apply and 2026 Thresholds

What Is Small Business Rates Relief?

Business rates (formally non-domestic rates) are a property tax levied on most commercial and non-residential properties in England. The annual bill is calculated by multiplying the property rateable value (set by the Valuation Office Agency, an executive agency of HMRC) by the multiplier set by central government each April. Small business rates relief (SBRR) reduces or eliminates this bill for eligible small businesses. It is one of the most significant business rates reliefs available and was substantially widened in April 2017 when the threshold for 100% relief was increased from GBP 6,000 to GBP 12,000.

SBRR is administered by local billing authorities in England - typically the district or borough council. In unitary authority areas, the unitary authority administers it. Equivalent but separate schemes apply in Wales (Small Business Rate Relief Wales), Scotland (Small Business Bonus Scheme), and Northern Ireland (Small Business Rate Relief Northern Ireland), each with their own thresholds and rules.

SBRR Thresholds and How Relief Is Calculated (England 2025/26)

The current SBRR thresholds in England:

• Rateable value GBP 12,000 or below: 100% relief. The entire business rates bill is reduced to zero. The business still benefits from the small business multiplier for valuation purposes.
• Rateable value GBP 12,001 to GBP 14,999: tapered relief. The relief decreases on a straight-line basis from 100% at GBP 12,000 to 0% at GBP 15,000. A property with a rateable value of GBP 13,500 (the midpoint) receives approximately 50% relief.
• Rateable value GBP 15,000 or above: no SBRR. However, the small business multiplier (49.9p vs 54.6p standard) continues to apply to properties with rateable values below GBP 51,000, representing a saving of 4.7p per pound of rateable value.

Three worked examples for 2025/26:

• Property with RV GBP 8,000: GBP 8,000 x 0.499 = GBP 3,992 gross charge. With 100% SBRR: GBP 0.
• Property with RV GBP 13,000: GBP 13,000 x 0.499 = GBP 6,487 gross charge. With approximately 67% SBRR: approximately GBP 2,140.
• Property with RV GBP 20,000: GBP 20,000 x 0.499 = GBP 9,980 (no SBRR but small multiplier applies as RV below GBP 51,000).

The Multiple Properties Rule

SBRR is intended for businesses occupying a single property. Where a business occupies more than one property:

• If the second property has a rateable value of less than GBP 2,900, the business can continue to receive SBRR on its main property for 12 months from taking on the new property.
• If the additional property has a rateable value of GBP 2,900 or more, SBRR ceases on all properties held by that business immediately.
• Properties across different local authority areas are combined when applying this rule.
• The rule applies to the business ratepayer (the legal entity in occupation). A company with multiple subsidiaries, each occupying separate properties, is not the same ratepayer for each subsidiary.

Businesses must notify the local billing authority promptly if they take on an additional property. Failure to notify can result in overpaid relief being recovered, with interest.

How to Apply for SBRR

SBRR is not automatically applied to all eligible properties when a business first moves in. The application process:

1. Identify the correct billing authority - the district or borough council (not the county council) for the property location.
2. Contact the billing authority by phone, via their website, or in writing to request the SBRR application form.
3. Provide the property address and rateable value, confirm the business occupies only one property (or provide details of additional properties).
4. The billing authority verifies eligibility and adjusts the rates demand accordingly.

Once in place, SBRR is reflected in annual demand notices and generally continues from year to year. Notify the billing authority promptly of any change in circumstances, particularly taking on additional properties.

Frequently Asked Questions

Do I pay business rates if I run a business from home?

If part of your home is used exclusively for business purposes, the Valuation Office Agency may assess that part for business rates. If business use is incidental to domestic use - for example a spare bedroom used occasionally for work - business rates do not apply. Contact the VOA for an assessment of your specific situation if you are uncertain.

Is SBRR the same as a business rates exemption?

No. SBRR is a statutory relief that reduces the charge. Some property types are entirely exempt from business rates under Schedule 5 of the Local Government Finance Act 1988, including agricultural land and buildings. Charities qualify for separate mandatory 80% charitable relief. These are distinct from SBRR.

Can I get SBRR and Retail, Hospitality and Leisure relief at the same time?

Yes, the reliefs can be applied cumulatively. Where a qualifying retail, hospitality, or leisure property also qualifies for SBRR, both reliefs are applied. For the smallest properties (RV below GBP 12,000), SBRR provides 100% relief making the RHL relief additive only in the tapered SBRR band.

What is the VOA and how do I find my rateable value?

The Valuation Office Agency (VOA) is an executive agency of HMRC that sets rateable values for all non-domestic properties in England and Wales. You can find your property rateable value and challenge it through gov.uk/find-business-rates. Rateable values are publicly accessible.

What if I disagree with my rateable value?

Challenge it through the Check, Challenge, Appeal (CCA) process at gov.uk/correct-your-business-rates. The three stages are: Check (confirm the property details held by VOA are accurate), Challenge (submit evidence that the rateable value is wrong), and Appeal (to the independent Valuation Tribunal for England if the Challenge is unsuccessful). A successful challenge is applied to past bills within the rules of the rating period.