Rachel Reeves has confirmed a major shift in the business rates system for England, unveiling permanently lower tax rates for retail, hospitality and leisure (RHL) properties as part of today’s Budget - a move the chancellor said will deliver nearly £900m in relief each year and benefit more than 750,000 premises, including convenience stores.
From 2026/27, the new RHL business rates multipliers will sit 5p below their national equivalents, setting the small business RHL multiplier at 38.2p and the standard RHL multiplier at 43p. According to the Treasury, this means small and standard RHL properties will face the lowest tax rates since 1990–91 and 2010–11 respectively.
To fund the permanent discount, the government will introduce a higher rate for the most valuable properties – those with rateable values over £500,000. This will affect around 1 per cent of premises, with the multiplier set at 50.8p in 2026/27, 2.8p above the national standard rate.
The Budget also confirmed the next set of revaluation figures: the small business multiplier will fall to 43.2p, and the standard multiplier to 48p, meaning all ratepayers will pay lower tax rates than they do currently. Reeves said that after revaluation, over half of ratepayers will see no increase in bills, including 23 per cent seeing their bills go down.
For those facing higher bills, the government outlined a £4.3bn, three-year support package, including a £3.2bn Transitional Relief scheme and an expanded Supporting Small Business scheme specifically designed to protect independent shops and pubs as they shift to the new system.
Further reforms include an additional two years of Small Business Rates Relief for businesses expanding into a second property, and a call for evidence on tackling barriers to investment, including concerns around the Receipts & Expenditure valuation methodology.
‘5p discount does not go far enough’
The Association of Convenience Stores warned that the newly announced RHL multiplier fails to compensate for the end of the remaining 40 per cent Retail, Hospitality and Leisure relief introduced during the pandemic.
ACS highlighted how the numbers will play out on the ground. Under the current system, a shop with a rateable value of £30,000 pays:
- £14,970 using the standard small business multiplier
- Reduced by 40% RHL relief = £8,982
Under the new system, the same store would pay:
- 30,000 × 0.382 = £11,460
ACS says the new discount leaves many convenience stores facing higher bills than before.
The trade body did, however, welcome new enforcement powers against illicit vape sales, including potential fines of up to £10,000 and the introduction of digital duty stamps.
Other Budget measures impacting convenience retailers
- Fuel duty frozen until September 2026
- Tobacco duty to rise by RPI + 2%
- Alcohol duty to rise by RPI
- 100% business rates relief for EV charging points and EV-only forecourts for 10 years