The multiplier business rates system forms the backbone of commercial taxation in the UK. This system determines how much businesses pay in rates each year.
The business rates multiplier works as a pence-in-the-pound calculation. It multiplies your property’s rateable value (RV) to calculate your final bill.
Understanding this system helps small businesses plan their finances effectively. It also reveals opportunities for potential savings through various relief schemes.
In this guide we will explain you how business rates, multipliers and relief schemes work for UK small businesses. It will also help owners in understanding obligations, find savings and plan ahead.
Current multiplier business rates 2025
For 2025-26, the multiplier is 55.50p in the pound or, for small businesses, 49.90p in the pound. The Government sets these rates annually across England.
For 2025/26, the small business multiplier (rateable value below £51,000) is again frozen at 49.9p. This freeze protects over one million properties from inflation increases.
The standard multiplier affects properties with higher rateable values. The standard multiplier (rateable value £51,000 or more) is being increased from 54.6p to 55.5p.
| Property Type | Rateable Value | Multiplier Rate | Example Calculation |
|---|---|---|---|
| Small Business | Below £51,000 | 49.9p | £30,000 × 0.499 = £14,970 |
| Standard Business | £51,000+ | 55.5p | £60,000 × 0.555 = £33,300 |
| Small Business (Relief) | £12,000 or less | 0p (100% relief) | £12,000 × 0 = £0 |
How are business rates calculated UK?
The calculation process involves multiplying your rateable value by the appropriate multiplier. Use the standard multiplier if your rateable value is £51,000 or more. Use the small business multiplier if your rateable value is below £51,000.
Your local council’s Valuation Office Agency determines your property’s rateable value. This represents the annual rental value your property could achieve.
Multiply your rateable value by your multiplier. This shows you how much you will have to pay in business rates (before any relief is deducted).
Step-by-step calculation process
- Find your property’s rateable value on the rating list
- Determine which multiplier applies to your business
- Multiply rateable value by the appropriate multiplier
- Apply any eligible relief schemes or discounts
- Check for transitional relief if your rates have increased significantly
Small business rates relief UK schemes
Multiple relief schemes help reduce business rates for qualifying small businesses. These schemes significantly lower the financial burden on smaller enterprises.
For properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%. This tapered relief system provides proportional support.
Properties with rateable values of £12,000 or less receive complete exemption. This means thousands of small businesses pay no business rates at all.
| Rateable Value | Relief Percentage | Annual Saving (Example) |
|---|---|---|
| £0 – £12,000 | 100% | Up to £5,988 |
| £12,001 – £13,000 | 75% | Up to £3,243 |
| £13,001 – £14,000 | 50% | Up to £2,495 |
| £14,001 – £15,000 | 25% | Up to £1,873 |
New business rates system 2025 changes
The new business rates system 2025 introduces significant reforms. The freeze on the small business multiplier offers immediate relief, maintaining stability for small enterprises.
The Government announced the Retail, Hospitality and Leisure Business Rates Relief scheme for 2025-2026, which comes into effect from 1 April 2025. This will provide eligible, occupied, retail, hospitality and leisure properties with a 40% relief.
Future reforms from 2026 will create different multipliers for various property types. The government plans permanently lower rates for retail, hospitality, and leisure properties.
| Date | Change | Impact |
|---|---|---|
| April 2025 | RHL 40% relief begins | Immediate 40% discount for qualifying businesses |
| Autumn 2025 | Budget confirms 2026 rates | Clarity on future multipliers |
| April 2026 | New multiplier system | Permanent lower rates for RHL properties |
Business rates explained for different property types
Business rates UK affect all commercial properties differently. The system varies based on property type, size, and usage.
Commercial property rates UK apply to offices, shops, warehouses, and factories. Each category faces different challenges under the current system.
Local shops business rates often qualify for additional relief schemes. These businesses typically have lower rateable values and benefit from small business multipliers.
| Property Type | Typical RV Range | Common Relief | Multiplier Used |
|---|---|---|---|
| Small Retail Shop | £5,000-£25,000 | Small Business Relief | 49.9p or reduced |
| Office Space | £20,000-£100,000 | Limited relief | 49.9p or 55.5p |
| Industrial Unit | £15,000-£80,000 | Various schemes | 49.9p or 55.5p |
| Restaurant | £10,000-£50,000 | RHL Relief 2025 | 49.9p (40% off) |
Landlords business rates responsibilities
Landlords business rates obligations depend on occupancy status and lease agreements. Empty properties often remain the landlord’s responsibility for rates payment.
Most lease agreements transfer business rates liability to tenants. However, landlords must understand their potential obligations during void periods.
Do landlords pay business rates on empty properties? Yes, typically after initial exemption periods expire. Different property types have varying empty property relief periods.
| Period | Empty Property Status | Rates Liability |
|---|---|---|
| First 3 months | Industrial property | No rates payable |
| First 6 months | Other properties | No rates payable |
| After exemption | All empty properties | Full rates apply |
| Long-term empty | 2+ years empty | Possible premium rates |
Business rates reform UK progress
Business rates reform UK continues evolving to support economic growth. “We need a permanently lower multiplier of 45p for all businesses by the end of this parliament, regardless of sector” according to business lobby groups.
The government recognises current system limitations affecting business investment. Reform proposals aim to create fairer, growth-supporting taxation.
At that fiscal event, the government will also confirm the rates for its permanently lower tax rates for RHL properties with RVs below £500,000 from April 2026, and the rate for the high value multiplier to fund this.
Transitional relief business rates support
Transitional relief business rates help businesses manage significant rate increases. This system limits annual increases to manageable amounts.
The 2023 revaluation created substantial changes for many properties. Transitional relief schemes protect businesses from sudden, large increases.
Scheme for businesses which will cap bill increases at £600 per year for any business losing eligibility for some or all Small Business Rates Relief or Rural Rate Relief at the 2023 Valuation.
| Business Type | Annual Increase Cap | Maximum Protection |
|---|---|---|
| Small Business | £600 per year | Up to £1,800 total |
| Standard Business | Percentage-based | Varies by property |
| Large Business | Higher caps apply | Limited protection |
Council Tax vs Business rates differences
Council tax vs business rates serve different purposes in local taxation. Council tax applies to residential properties, while business rates cover commercial premises.
Council tax uses property bands A-H based on 1991 values. Business rates use current rateable values updated through regular revaluations.
Both taxes fund local council services, but business rates also support national government spending. The collection and distribution methods differ significantly between systems.
| Aspect | Council Tax | Business Rates |
|---|---|---|
| Property Type | Residential | Commercial |
| Valuation Base | 1991 values | Current market rental |
| Payment Responsibility | Residents | Occupiers/owners |
| Relief Schemes | Limited options | Multiple schemes available |
Business rate calculator UK tools
Business rate calculator UK tools help estimate annual costs. These calculators use rateable values and current multipliers for accurate estimates.
Government websites provide official calculation tools. Local councils also offer calculators specific to their areas.
How to calculate business rates UK: Enter your rateable value, select appropriate multiplier, apply relevant reliefs. The result shows your estimated annual bill.
Business Rates Differences Across the UK
Business rates work differently depending on where you are:
England
- Uses the multiplier system described above
- Revaluation happens every three years (next one: April 2026)
- Various reliefs available including small business rate relief and retail relief
Scotland
- Called “Non-Domestic Rates”
- Has its own multiplier system (known as the “poundage”)
- Small business bonus scheme available
- Different relief thresholds than England
Wales
- Similar system to England but with different multipliers
- Small business rates relief scheme with different qualifying criteria
- Retail, leisure and hospitality rates relief available
Northern Ireland
- Called “rates” or “non-domestic rates”
- Calculated using the regional rate and district rate
- Industrial derating offers relief for manufacturing properties
- Different relief schemes available
Important: Always check with your local council or valuation office for the exact rates and reliefs that apply to your location.
Relief Eligibility for multiple properties
Many business owners have multiple properties and wonder how this affects their relief eligibility. Here’s what you need to know:
Small business rate relief (England)
Eligibility:
- Your main or only property has a rateable value below £15,000
- If you have multiple properties, their total rateable value must be under £28,000 (with none individually over £20,000)
How much relief:
- 100% relief if rateable value is £12,000 or less
- Relief on a sliding scale between £12,001 and £15,000
- Example: A property with a £14,000 rateable value gets roughly 25% relief
Multiple properties scenario:
You own three shops:
- Shop A: £10,000 rateable value (your main property)
- Shop B: £8,000 rateable value
- Shop C: £7,000 rateable value
- Total: £25,000 (under the £28,000 limit)
Shop A would qualify for small business rate relief. The other properties would pay standard rates.
How much business rates cost small businesses?
How much business rates cost depends on property value and available reliefs. Small businesses often pay significantly less than larger enterprises.
Properties under £12,000 rateable value typically pay nothing. Those between £12,001-£15,000 receive substantial discounts through tapered relief.
Average small business rates range from £0-£15,000 annually. Location, property type, and size significantly influence final amounts.
| Business Size | Rateable Value | Annual Cost (Before Relief) | After Small Business Relief |
|---|---|---|---|
| Micro Business | £8,000 | £3,992 | £0 |
| Small Shop | £20,000 | £9,980 | £7,484 |
| Medium Office | £40,000 | £19,960 | £19,960 |
| Large Warehouse | £70,000 | £38,850 | £38,850 |
How to appeal your rateable value?
If you think your rateable value is too high, you can challenge it. Here’s how:
Step 1: Check Your Rateable Value
Find your property’s rateable value on the Valuation Office Agency (VOA) website or your rates bill. Compare it to similar properties in your area.
Step 2: Gather Evidence
You’ll need proof that your rateable value is wrong. This could include:
- Details of similar properties with lower rateable values
- Evidence of property issues (damp, structural problems, access difficulties)
- Changes in the local area affecting your business
- Rent you’re actually paying versus the assessed value
- Photos and documentation
Step 3: Check Your Grounds for Appeal
Valid reasons include:
- The property description is wrong (size, features, location)
- Similar properties have lower rateable values
- Physical changes to the property or area
- Your property is affected by roadworks, construction, or other disruptions
Invalid reasons (that won’t succeed):
- You simply think it’s too expensive
- You can’t afford to pay
- You disagree with how business rates work in general
Step 4: Submit Your Challenge
For properties in England:
- Go to the VOA website (gov.uk/challenge-business-rates-valuation)
- Create an account or log in
- Submit your “Check” (reviewing the information held)
- If needed, submit a “Challenge” with your evidence
- If still not satisfied, submit an “Appeal”
Timeline: You have clear deadlines, so don’t delay. Generally, you must start a Check within certain time periods after a revaluation.
For Scotland, Wales, or Northern Ireland: Contact your local assessor or valuation office for their specific process.
Step 5: What Happens Next
- The VOA or local assessor reviews your case (can take several months)
- They may contact you for more information
- They’ll either accept your challenge and reduce your rateable value, or reject it
- If rejected and you still disagree, you can appeal to an independent tribunal
Important Tips:
- You still must pay your business rates while appealing
- If successful, you may get a refund for overpayments
- Consider using a rating surveyor for complex cases
- Keep paying on time to avoid penalties
Value multiplier and property assessments
Value multiplier calculations connect property values to tax obligations. The rateable value multiplier system ensures consistent application across England.
Professional valuers assess commercial properties every few years. These revaluations update rateable values to reflect current market conditions.
Understanding your property’s valuation helps predict future rate changes. Businesses can appeal assessments they consider unfair or inaccurate.
Uniform business rate multiplier system
The uniform business rate multiplier creates consistency across England. All councils use identical multipliers set by central government.
This uniformity prevents regional variations that could distort business location decisions. However, local relief schemes can create practical differences.
The system balances national consistency with local flexibility. Councils can provide additional support through discretionary relief schemes.
Multiplier business rates: What differences for Wales, Scotland, Northern Ireland
Business rates (known as non-domestic rates) are taxes on properties used for business purposes. The “multiplier” is the rate used to calculate how much you pay. While the system is similar across the UK, each nation sets its own multiplier and has different rules.
England
- Standard multiplier (2024/25): 54.6p per £1 of rateable value
- Small business multiplier: 49.9p per £1 of rateable value
- Set annually by the UK Government
- Properties with rateable value under £51,000 may qualify for small business rate relief
- Revaluations happen every few years (most recent: April 2023)
Wales
- Standard multiplier (2024/25): 56.2p per £1 of rateable value
- Set by the Welsh Government
- Small business rate relief available for properties with rateable value up to £6,000
- Some properties between £6,001 and £12,000 get partial relief
- Different relief schemes may apply
- Revaluation cycle follows its own schedule
Scotland
- Basic property rate (2024/25): 49.8p per £1 of rateable value
- Intermediate property rate: 53.5p (for properties £51,001-£100,000)
- Higher property rate: 54.5p (for properties over £100,000)
- Set by the Scottish Government
- Scotland has three different multipliers based on property value
- Small business bonus scheme available
- Different relief and exemption schemes than England
- More frequent revaluations planned
Northern Ireland
- Regional rate (2024/25): Set separately by Department of Finance
- District rate: Set by each local council (varies by area)
- Your total bill combines both rates
- Different thresholds for small business relief
- Industrial derating offers significant relief for manufacturing properties
- Separate revaluation schedule
- Different appeals process
Future business rates changes 2025 and beyond
Business rates changes 2025 represent just the beginning of comprehensive reform. The government plans more substantial changes from 2026 onwards.
The Autumn Budget 2025 will confirm the exact rates for each multiplier. The government will define eligibility for RHL properties through secondary legislation.
These changes aim to create a fairer system supporting business growth. Small businesses should monitor developments affecting their future costs.
| Year | Planned Changes | Expected Impact |
|---|---|---|
| 2025 | RHL relief scheme | 40% reduction for qualifying businesses |
| 2025 | Small business freeze | Continued multiplier protection |
| 2026 | New multiplier structure | Permanent lower rates for some sectors |
| 2027+ | Further reforms | Comprehensive system overhaul |
For official statistics, relief details, and updates on business rates, please refer to these UK government resources: Business Rates Calculator, Small Business Rate Relief, Business Rates Forward Look.
Conclusion
Understanding multiplier business rates is essential for managing your small business finances effectively. The current system offers various relief schemes and frozen multipliers that can significantly reduce your tax burden.
Take time to review your rateable value, confirm which multiplier applies to your property, and explore all available relief schemes. Many small businesses qualify for substantial reductions or even complete exemption from business rates.
Stay informed about upcoming reforms, as these changes could further impact your costs. If you believe your rateable value is incorrect, don’t hesitate to challenge it through the proper channels.
By understanding how business rates work and taking advantage of available support, you can reduce costs, improve cash flow, and focus your resources on growing your business.
FAQs about Business Rates Multiplier
What is the business rates multiplier UK?
The business rates multiplier UK is the rate per pound used to calculate your annual business rates bill. The small business multiplier is 49.9p and the standard multiplier is 55.5p from 1 April 2025 to 31 March 2026.
How to work out rates payable from rateable value?
To work out rates payable from rateable value, multiply your property’s rateable value by the appropriate multiplier rate. Then subtract any applicable reliefs or discounts to get your final bill.
What is the difference between small business rates multiplier and standard multiplier?
The difference between small business rates multiplier and standard multiplier is 5.6p per pound. Small businesses with rateable values below £51,000 use the lower 49.9p multiplier, while larger businesses use the 55.5p standard multiplier.
Do landlords pay business rates on empty properties?
Yes, landlords typically pay business rates on empty properties after initial exemption periods. Industrial properties get 3 months exemption, while other properties get 6 months before rates become payable.
How are business rates calculated for 2025?
Business rates for 2025 are calculated by multiplying your rateable value by either 49.9p (small businesses) or 55.5p (standard businesses), then applying any eligible relief schemes like the 40% RHL discount.
What relief schemes are available for small businesses?
Relief schemes for small businesses include 100% relief for properties under £12,000 rateable value, tapered relief up to £15,000, 40% retail/hospitality/leisure relief, and various local authority discretionary schemes.
When do business rates multipliers change?
Business rates multipliers change annually on 1st April. The government sets new rates each year, usually increasing with inflation, though small business multipliers have been frozen in recent years.
Can I appeal my business rates assessment?
Yes, you can appeal your business rates assessment if you believe your rateable value is incorrect. Appeals must be made through the Valuation Office Agency with evidence supporting your case.
What happens if I don’t pay business rates?
If you don’t pay business rates, councils can take enforcement action including bailiff visits, charging orders on property, or bankruptcy proceedings. Interest and costs are added to unpaid amounts.
How do business rates affect cash flow for small businesses?
Business rates affect cash flow through regular monthly or annual payments. Many small businesses benefit from relief schemes that reduce or eliminate these costs, improving their cash flow position significantly.
