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Business rates in England are set to change from 1st April. The Valuation Office Agency (VOA) has recently undertaken revaluation of business rates applicable to commercial property, in line with the 3-year review cycle. From 1st April 2026, the rateable value of commercial property will be based upon rental values at April 2024.

Those classified as ‘small businesses’ may qualify for Small Business Rates Relief, which has a sliding scale of relief for businesses with a rateable value between £12,000 and £15,000.   100% relief is available for properties with a rateable value below £12,000, provided that this is the only property occupied by the tenant. For those who currently occupy a building close to the £15,000 threshold, the revaluation may push the rateable value of the property outside of the scope of Small Business Rates Relief, meaning it becomes subject to full business rates. The revaluation figures for each premises are now available on the VOA website.

Between April 2026 and April 2029, there will be a phasing in of a new legal duty for ratepayers to notify the VOA of changes to their commercial property. Notification is required for any changes that might affect the property’s rateable value, which may relate to changes in the tenancy, alterations to the building, or changes in use. This will also apply to properties which are currently not rated but may be rateable if the VOA was aware of its use as commercial property. Ratepayers will be required to notify the VOA within 60 days of the change, with an expectation that there will be penalties if this is not complied with. The VOA is due to release a new portal to ease the notification process.

In practice, this won’t be a major issue to landlords where their property is already subject to business rates. However, where a property is let and is not currently subject to business rates, this change will apply and could have an effect on the ability to let that building given the increased cost to the tenant. Most leases include the requirement for the tenant to pay any business rates, even if they were not chargeable at the beginning of the lease, which protects the landlord somewhat. However, there will be an impact on landlords during any void periods as they will be responsible for covering the business rates until a new tenant is found. The legislation relating to this has not yet been finalised, and the notification portal has not been approved or opened. 

There will also be some interest in how the notification for business rates will interact with planning enforcement and whether local authorities take action where a building is let without planning permission and is subject to business rates.

Should you have any queries on the above, please contact Emily.