Business Rates Reset on 1 April Brings £3.4bn Tax Hike
A new business rates cycle comes into effect on 1 April across England, Scotland and Wales, marking the first revaluation to take place under the new three-yearly cycle and resetting liabilities across the commercial property landscape and 2.39 million non-domestic properties.
According to the global tax firm Ryan, business rates receipts UK-wide are expected to increase from £33.7bn in 2025/26 to £37.1bn in 2026/27, a rise of £3.4bn (10.1%).
“This is a significant increase in business rates receipts driven by inflationary uprating, an allowance for losses on appeal and the withdrawal of government support for the retail, leisure and hospitality sectors rather than the effects of the revaluation itself,” said Alex Probyn, Practice Leader for Europe & Asia-Pacific Property Tax at Ryan.
The removal of Exchequer funded reliefs for retail, hospitality and leisure, which cost the Treasury £1.385bn in England in 2025/26 through a 40% discount capped at £110,000 per business, has not been extended into 2026/27. Instead, lower RHL multipliers have been introduced, with the cost now borne by higher-value properties through a new 2.8p ‘surtax’.
UK Business Rates Receipts Over Time
| Year | Receipts (£bn) | YoY Change (£bn) | YoY Change (%) |
| 2016/17 | £28.1bn | — | — |
| 2017/18 | £29.0bn | +£0.9bn | +3.2% |
| 2018/19 | £30.1bn | +£1.1bn | +3.8% |
| 2019/20 | £31.5bn | +£1.4bn | +4.7% |
| 2020/21 | £26.0bn | −£5.5bn | −17.5% |
| 2021/22 | £25.6bn | −£0.4bn | −1.5% |
| 2022/23 | £29.5bn | +£3.9bn | +15.2% |
| 2023/24 | £31.9bn | +£2.4bn | +8.1% |
| 2024/25 | £32.1bn | +£0.2bn | +0.6% |
| 2025/26 | £33.7bn | +£1.6bn | +5.2% |
| 2026/27 | £37.1bn | +£3.4bn | +10.1% |
Source: global tax firm Ryan
Business rates receipts have followed a steady, largely inflation-driven path, with the only major disruption occurring during the COVID period. But comparing recent revaluation cycles shows that changes in receipts vary significantly depending on both wider economic and policy conditions.
Revaluation Year Comparison
| Revaluation | Year | Receipts (£bn) | YoY Change (£bn) | YoY Change (%) |
| 2017 | 2017/18 | £29.0bn | +£0.9bn | +3.2% |
| 2023 | 2023/24 | £31.9bn | +£2.4bn | +8.1% |
| 2026 | 2026/27 | £37.1bn | +£3.4bn | +10.1% |
Source: global tax firm Ryan
The variation reflects differences in inflation and policy settings at each point in time.
“Receipts increase in revaluation years but those increases have become larger over time, reflecting inflation and policy changes rather than the revaluation itself which is revenue neutral,” Probyn added.
Revaluations, which create ‘winners’ and ‘losers’, are particularly pronounced in sectors valued using the Receipts and Expenditure method, including the hospitality and leisure sectors. In these cases, valuations are driven by trading performance rather than rental evidence, meaning the shift from pandemic-suppressed turnover in 2021 to more normalised trading conditions in 2024 (and 2025 in Scotland) has produced step-change increases in rateable values.
“The Government recognised the challenges around receipts and expenditure valuations through its current call for evidence, but any meaningful reform is unlikely to take effect before 2029. That will come too late for many businesses, as even with transitional caps in place limiting increases, those increases will still compound and bills can more than double by the end of the cycle,” Probyn warned.
Beyond these sectors, upward pressure is also evident in prime office markets and logistics, reflecting continued strength in underlying rental values and occupational demand in key locations.
Notably, Northern Ireland, which was also due to revalue in 2026, has paused the process following political intervention in January after sustained pressure from the hospitality sector. As a result, it enters the new financial year without a revaluation and with no confirmed timetable for its resumption.
“Pausing revaluation in Northern Ireland reflects a political choice about how to respond to post-pandemic increases in valuations, highlighting the divergence in policy across the devolved nations,” Probyn said.