Inflation Freeze at 3.8% Still Delivers £1 Billion Business Rates Blow

Businesses across England face a £1.06 billion increase in non-domestic property tax liabilities from April 2026 following the release of September’s inflation figures, according to analysis by global tax firm Ryan.

The Office for National Statistics (ONS) confirmed on October 22nd that the Consumer Prices Index (CPI) stood at 3.8% in September 2025. Each September CPI figure sets the increase to the overall business rates yield for the following financial year even in a revaluation year.

From April 2026, a nationwide revaluation will reset Rateable Values to reflect the property market at 1 April 2024. Revaluations are designed to be revenue neutral nationally, redistributing the tax burden between sectors and regions depending on changes in rental values but inflation still drives up the overall yield.

Alex Probyn, Practice Leader of Property Tax, Europe and Asia Pacific at global tax firm Ryan, said:
“September’s inflation figure locks in a £1.06 billion increase in the business rates yield in England for next year. The UK already has the highest property taxes in the developed world 3.7 % of GDP compared to just 1.4 % across the EU. For large occupiers this is a double hit: inflation increasing the yield and a new 10p supplement on large properties. That combination risks undermining competitiveness at a critical moment for the economy.”

Business rates are devolved to Scotland, Wales and Northern Ireland.