Premises and equipment

Renting business premises

What to consider when renting commercial property.

UK-wide
Guide summary

Before renting business premises, get legal advice and check the property is suitable. You must usually pay business rates and may be responsible for repairs. Negotiate lease terms like break clauses.

  • Get legal advice before signing a lease
  • Check the property allows your type of business
  • Commercial leases often last 5-25 years
  • Business rates are tax on commercial property
  • You may need to do repairs as tenant
  • Negotiate rent-free periods and break clauses
  • Each UK nation has different business rate reliefs
On this page
UK-wide

Related guides in Tax & Finance

Understanding business rates

How business rates are calculated from your property's rateable value and the multiplier, including how rates differ across …

Renting business premises is a significant commitment. Commercial leases are very different from residential tenancies and you'll have more responsibilities as a tenant.

Lease length
Commercial leases often run 5-25 years.
Business rates
You'll usually be responsible for paying business rates.
Repairs
Many commercial leases require tenants to maintain the property.
Break clauses
Negotiate a break clause to exit the lease early if needed.
  1. 1

    Get legal advice

    Have a solicitor review the lease before signing.

  2. 2

    Check permitted use

    Ensure the property can be used for your type of business.

  3. 3

    Negotiate terms

    Discuss rent-free periods, break clauses, and repair responsibilities.

Business rates and reliefs

Business rates (non-domestic rates) are taxes on commercial properties. The amount depends on your property's rateable value and where in the UK you operate. Each nation has different relief schemes for small businesses.

Food, Drink & Hospitality Requirement

Late Night Levy: Additional costs for premises selling alcohol after midnight

If your premises sells alcohol between midnight and 6am, you may have to pay an annual Late Night Levy to your local authority. This charge funds policing and community safety in the late-night economy.

Where it applies

Only 10-11 local authorities have adopted the levy (as of 2025):

  • London: City of London, Camden, Islington, Hackney, Tower Hamlets, Southwark
  • Outside London: Newcastle, Liverpool, Chelmsford, Nottingham, Bolton

Annual levy amounts (based on rateable value)

  • Up to £4,300: £299/year
  • £4,301-£33,000: £768/year
  • £33,001-£87,000: £1,259/year
  • £87,001-£125,000: £1,365-£2,730/year*
  • Over £125,000: £1,493-£4,440/year*

*Higher amounts apply to premises primarily selling alcohol for on-premises consumption

Exemptions available

  • Hotels (accommodation only - not bars open to public)
  • Theatres and cinemas (alcohol only to ticket holders)
  • Bingo halls, community sports clubs, country village pubs
  • Premises in Business Improvement Districts focused on night-time economy

30% reduction available

  • Active membership of approved schemes (Pubwatch, Best Bar None)
  • Small businesses receiving rate relief (rateable value £12,000 or less)

Revenue distribution

At least 70% goes to police for late-night policing. Up to 30% retained by local authority for community safety and street cleaning.

Who this applies to: Hospitality businesses in specific local authority areas licensed to sell alcohol or provide late night refreshment between midnight and 6am.
Enforcement: <p><strong>Non-payment consequences:</strong></p><ul><li>Premises licence or club certificate will be <strong>suspended</strong></li><li>No alcohol sales permitted during suspension</li><li>Unpaid amounts recoverable as civil debt</li><li>Minimum 2 working days' notice before suspension</li></ul><p>Payment is due with your annual licence fee renewal, or within 14 days of a new licence being granted.</p>
Late Night Levy guidance (GOV.UK) (opens in a new tab)
Renting business property (opens in a new tab)