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The Retail, Hospitality and Leisure Relief (RHLR) has been extended for a further year, albeit at a reduced discount rate of 40% rather than the current 75%. From April 2026, the government will move to permanently lower business rates for these businesses with the increase being funded by a higher multiplier for properties with rateable values above £500,000. Additionally, the small business rates multiplier will be frozen for a further year.
All businesses in the retail, hospitality, and leisure sector. However, the maximum amount of the relief is £110,000 per business.
Small businesses with properties with a rateable value of less than £51,000 will benefit from the freeze in the small business multiplier.
The RHLR extension will take effect from April 2025, with permanently lower rates for retail hospitality and leisure businesses expected to apply from 2026 onwards.
The freeze in the small business multiplier will also take effect from April 2025.
Having previously faced a cliff edge at the planned lapsing of the current 75% relief, the extension of Retail, Hospitality and Leisure rates relief is a lifeline to pubs, hotels, cafes, and shops across the country.
This targeted relief will save a medium sized retail property with a rateable value of £45,000 around £9,000 from their business rates bill. The announcement that the government intends to support a transition to permanently lower tax rates for these businesses from 2026-27 also provides them with much needed long-term certainty. Meanwhile, larger businesses in these sectors that occupy multiple properties may be disappointed that the cap on relief was not increased.