Business rates relief schemes

Several relief schemes can significantly reduce or eliminate your business rates bill. Eligibility varies by UK nation, property type, and business circumstances.

RETAIL & CONSUMER GOODS Advantage

If you operate a retail business in England, you can claim Retail, Hospitality and Leisure (RHL) Relief:

40% discount on business rates for 2025/26 (reduced from 75% in 2024/25)
Applies to properties used wholly or mainly for retail purposes
Includes shops, supermarkets, retail warehouses, chemists, post offices, showrooms
No rateable value limit - all sizes qualify
Capped at £110,000 per business across all properties

Worked example:

Shop with rateable value of £50,000 in England
Standard calculation: £50,000 x 0.555 (55.5p multiplier) = £27,750
With 40% RHL relief: £27,750 x 0.6 = £16,650
Annual saving: £11,100

Multi-site example:

3 shops: £40,000 RV each = £66,600 total rates bill
With 40% RHL relief: £39,960 total
Annual saving: £26,640 (within £110,000 cap)

Important: From April 2026, permanent lower multipliers for retail properties replace this temporary relief scheme.

Who this applies to: Retail businesses operating in England only. Not available in Scotland, Wales, or Northern Ireland. Includes both independent retailers and chains.

Enforcement: Apply through your local billing authority when you receive your rates bill. Relief is discretionary, so councils can refuse in exceptional circumstances, but refusal is rare.

FOOD, DRINK & HOSPITALITY Advantage

Hotels, pubs, restaurants, cafes, and other hospitality businesses in England qualify for Retail, Hospitality and Leisure (RHL) Relief:

40% discount on business rates bill for 2025/26
Covers properties used wholly or mainly for hospitality purposes
Includes restaurants, cafes, pubs, bars, nightclubs, hotels, guest houses, takeaways
No rateable value limit - all sizes qualify
Capped at £110,000 per business across all properties

Worked example - Restaurant:

Restaurant with rateable value of £50,000 in England
Standard calculation: £50,000 x 0.555 = £27,750
With 40% RHL relief: £27,750 x 0.6 = £16,650
Annual saving: £11,100

Worked example - Pub:

Pub with rateable value of £35,000 in England
Standard calculation: £35,000 x 0.555 = £19,425
With 40% RHL relief: £19,425 x 0.6 = £11,655
Annual saving: £7,770

Combined with small business relief: If your property qualifies for both small business rate relief AND RHL relief, you receive the more generous relief (not both). For most hospitality businesses, the 40% RHL relief is more valuable.

Who this applies to: Hospitality businesses in England only - not available in Scotland, Wales, or Northern Ireland. Must be wholly or mainly used for preparing and serving food/drink for consumption on or off the premises.

Enforcement: Claim through your local council billing authority when you receive your rates bill. Most councils automatically apply the relief if they identify your property as eligible, but check your bill carefully.

MANUFACTURING & ENGINEER… Advantage

Manufacturing and industrial businesses benefit from longer empty property relief periods compared to retail and office properties:

6 months empty property relief (vs 3 months for retail/office)
Applies to industrial properties: factories, warehouses, distribution centres, workshops
Available across England, Wales, and Scotland (different rates apply)
After 6 months, you pay full rates even if property remains empty

Worked example - England:

Warehouse with rateable value of £100,000 becomes vacant
Months 1-6: £0 rates (empty property relief)
From month 7: £100,000 x 0.555 = £55,500 per year (£4,625/month)
Total saving: £27,750 during 6-month relief period

Valuation advantage: Industrial properties typically have lower rateable values per square metre compared to retail or office space, even when the physical space is larger. This is because industrial rents are lower than retail/office rents in the open market.

Strategic timing: If selling or seeking new tenants, the 6-month relief period provides crucial breathing space to avoid rates on vacant industrial space. Plan marketing and handover to maximise this relief window.

Who this applies to: Manufacturing and industrial businesses occupying factories, warehouses, distribution centres, or workshops. Applies to properties across England, Wales, and Scotland. Northern Ireland has different industrial derating rules (see geographic callout).

Enforcement: Empty property relief is automatically applied by your local billing authority when you notify them the property is vacant. You must inform them within specified timeframes (usually within 6 weeks of vacation).

Charitable rate relief

Mandatory 80% and discretionary 20% relief for registered charities and CASCs.

Mandatory relief (charities): 80% automatic relief for registered charities
Discretionary top-up: Up to 20% additional relief (100% total) at council's discretion
CASC relief: Community Amateur Sports Clubs get 80% mandatory relief
Eligibility requirement: Property must be wholly or mainly used for charitable purposes

What qualifies as charitable use

The property must be used for the charity's purposes, including:

Charity shops selling donated goods
Offices used for charitable administration
Community centres run by charities
Charity-run care homes, hospices, schools

Trading activities: If a charity trades commercially (eg a café open to the public), that area may not qualify for relief.

Charitable rate relief guidance

CHARITIES & SOCIAL ENTER… Exemption

Registered charities and Community Amateur Sports Clubs (CASCs) receive the most generous business rates relief in the UK:

80% mandatory relief if property is wholly or mainly used for charitable purposes
Up to 20% discretionary relief at your local council's discretion (bringing total to 100%)
Most councils grant the full 100% relief to charities
No rateable value limit - applies to all charity properties regardless of size

Worked example - Charity shop:

Charity shop with rateable value of £20,000 in England
Standard calculation: £20,000 x 0.555 = £11,100
With 80% mandatory relief: £11,100 x 0.2 = £2,220
With additional 20% discretionary relief: £0
Total saving: £11,100 (100% relief)

Worked example - Community centre:

Community centre with rateable value of £50,000 in England
Standard calculation: £50,000 x 0.555 = £27,750
With 100% relief: £0
Annual saving: £27,750

Eligibility requirements:

Must be a registered charity with the Charity Commission (England/Wales), OSCR (Scotland), or CCNI (Northern Ireland)
Property must be wholly or mainly used for charitable purposes (at least 51% charitable use)
Mixed-use properties may receive partial relief proportional to charitable use

What qualifies as charitable purposes:

Charity retail shops selling donated goods
Community centres and village halls
Offices used for charitable administration
Warehouses storing donated goods for distribution
Sports facilities operated by CASCs

Who this applies to: Registered charities, Community Amateur Sports Clubs (CASCs), and certain non-profit organisations across England, Scotland, Wales, and Northern Ireland. Must be wholly or mainly used for charitable purposes to qualify for full relief.

Enforcement: Apply to your local billing authority for mandatory 80% relief. Discretionary top-up relief is assessed on a case-by-case basis. Most councils have policies to grant full 100% relief to charities, but this is not automatic - you must apply separately for the discretionary element.

Multi-site businesses should consider:

In Scotland and England, properties up to £12,000 RV receive 100% relief - optimal threshold for single premises
Scotland offers extended tapered relief to £20,000 RV (single property), providing advantage over England's £15,000 limit
In England, the RHL relief (40%) may be more valuable than small business relief for retail/hospitality above £12,000 RV
In Wales, properties just above £6,000 face a significant rates jump - consider downsizing if possible
In Northern Ireland, maximum 50% relief means costs are higher even for small properties - consider manufacturing premises for 70% industrial derating instead

Relief is applied annually. Check eligibility each April when new rates bills are issued and multipliers change.

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Business rates relief schemes