Government Confirms Scope of New Retail, Hospitality and Leisure Business Rates Multipliers Ahead of April 2026 Revaluation

The government has published detailed guidance setting out which properties will qualify for the new Retail, Hospitality and Leisure (RHL) lower business rates multipliers — a major reform due to take effect from 1 April 2026 to coincide with the 2026 Revaluation.

Under the new system, announced at the Autumn Budget 2024, two lower business rates multipliers will apply to RHL properties in England with rateable values (RVs) below £500,000:

• A Small Business RHL Multiplier for properties under £51,000 RV
• A Standard RHL Multiplier for properties between £51,000 and £499,999 RV

The move marks the first time that shops, restaurants, pubs, cafés, hotels, and other qualifying venues will receive a permanent, structural reduction in their business rates bills — replacing the short-term discretionary reliefs that have been renewed, albeit at different levels of discount, annually since 2020.

There will be no cash cap under the new regime, meaning all qualifying premises within a retail, hospitality, or leisure chain will benefit, not limited to a cash cap under the previous system which largely excluded chains. The government has also confirmed that eligibility will be determined strictly in accordance with new statutory definitions rather than local authority discretion.

The Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025 (SI 2025/1093) now laid before Parliament set out the qualifying criteria, broadly mirroring the current 40% RHL relief scheme in scope but applying it on a statutory rather than discretionary basis.

The new multipliers will apply only to occupied hereditaments and will be restricted to those “wholly or mainly” used for in-person retail, hospitality, or leisure activity provided to “visiting members of the public.”

Among the property types to qualify are:

• Retail – shops, supermarkets, florists, newsagents, opticians, markets, petrol stations/garages, jewelers, chemists, garden centres, tattooists, beauty salons and
• Hospitality – cafés, takeaways, restaurants, pubs, nightclubs, bars, hotels and guest houses,
• Leisure – cinemas, theatres, galleries, museums, gyms, health spas, sports clubs, bowling alleys, soft play centres and theme parks
• Excluded uses include financial, medical, and professional services, taxi/minicab firms and certain specialist uses such as betting shops, conference centres, and transport hubs.

Rates for the two new RHL multipliers will be confirmed at the Autumn Budget 2025 on 26 November, once the 2026 Revaluation and wider fiscal context are known.

Commenting on the announcement Alex Probyn, Practice Leader, Europe & Asia-Pacific Property Tax, at global tax firm Ryan said:

“With the cash cap of £110,000 in relief removed this is a major boost for multi-site operators. But many will now be anxiously waiting to see whether their larger stores and venues over £500,000 in rateable value, which are excluded from the lower tax rates, will attract the new supplement to standard rates. Across the retail, hospitality and leisure sectors, up to 4,353 premises could be caught by the supplement — facing an estimated £482 million a year extra in business rates.

Whilst gains from lower bills from the new lower RHL multipliers also risk being clawed back in part through higher bills on warehouses, distribution centres and corporate HQs — many of which are expected to face not only the supplement but sharp increases under the revaluation, creating a potential double hit.

For single-site and independent operators, the reduction in the multiplier will be broadly in line with existing discounts — offering stability rather than a step-change, but still far below the 75% relief in the previous financial year.”

From April 2026, a new surtax of up to 10p in the pound will apply to properties with an RV above £500,000 as part of the new five-tier multiplier system. These policies apply to England only, as business rates are a devolved tax.