Government Rules Out More Frequent Business Rates Revaluations In Major Reform Update
The Government has ruled out more frequent business rates revaluations as part of its response to the Transforming Business Rates Discussion Paper, published this week.
The decision means revaluations will remain on the triennial cycle, which ministers said strikes the “right balance” between fairness and certainty. The move comes only two years after the cycle was shortened from five years, following years of pressure from businesses to make the system more responsive to market conditions.
Key Autumn Budget announcements
The Autumn Budget 2025 (26 November) will be the decisive moment for reform. The Government has confirmed it will set out:
- A Transitional Relief package to cushion sharp bill increases at the 2026 revaluation.
- Permanent lower multipliers for retail, hospitality and leisure (RHL) properties under £500,000 RV.
- The rate of a new high-value multiplier for properties above £500,000 RV, which will fund those discounts.
Ministers also stressed that all reforms must remain revenue neutral, ensuring local government funding is not reduced.
Wider reform agenda
Alongside these Budget measures, the Government is consulting on a package of wider reforms, which could also be announced in November. These include:
- Replacing the current ‘slab’ system with a marginal (‘slice’) system where successive bands are taxed at increasing rates.
- Reviewing Small Business Rates Relief to smooth cliff-edges and encourage expansion aimed at second properties.
- Assessing the effectiveness of Improvement Relief, introduced last year but expected to deliver just £5m of relief in its first year.
- Modernising Empty Property Relief needed to reflect the realities of leasing cycles, while also considering a new General Anti-Avoidance Rule to curb abuse.
- Examining changes to the Receipts & Expenditure methodology ahead of the 2029 revaluation.
- Exploring a shorter Antecedent Valuation Date (AVD) to improve responsiveness.
- Completing the merger of the Valuation Office Agency with HMRC by end FY 2025–26.
Rising revenues
Forecasts by global tax services firm Ryan show that business rates income is set to rise sharply as temporary reliefs are withdrawn and multipliers rise with inflation:
- 2025/26 – £33.7bn
- 2026/27 – £37.3bn (+£3.6bn / +11%)
- 2027/28 – £37.6bn
- 2028/29 – £38.2bn
- 2029/30 – £39.2bn
The steepest increase comes in 2026/27, when Exchequer-funded support for high street businesses ends and the cost is shifted onto larger properties via the new multiplier.
Reaction
Alex Probyn, Practice Leader of Property Tax, Europe and Asia-Pacific, at global tax services firm Ryan, welcomed the certainty on revaluation frequency but warned that other parts of the system risk undermining investment and growth:
- On certainty: “Keeping the current revaluation cycle is the right decision. It gives businesses the stability they need to plan and invest with confidence.”
- On Improvement Relief: “The 12-month window doesn’t align with business investment cycles. With only £5 million expected to be awarded this year, it is not providing a meaningful incentive and must be strengthened if it is to support growth.”
- On Empty Property Relief: “Empty Property Relief is effectively a tax on the absence of income. It fails to cover refit periods, doesn’t allow enough time to find new tenants, and forces landlords to pay rates on unlettable space. Modernisation would remove the need for costly mitigation and, crucially, help incentivise investment — a far better outcome than curtailment.”
- On revenue neutrality: “Revenue neutrality runs through this report — but the numbers tell their own story. Rates income will jump by £3.6 billion, up 11% next year. That risks holding back growth and investment at the very time the economy needs support.”
Next steps
The Government will launch a short period of targeted engagement with stakeholders before the Autumn Budget 2025, when further decisions on business rates reform are expected to be announced.