UK Budget 2025: PwC comments on business rates

Phil Vernon, Head of Specialist Business Rates Projects at PwC UK:

“As announced in last year's Budget, business rates will be calculated on different tax rates per sector from April 2026, with properties used for retail, leisure and hospitality being calculated using lower rates multipliers. 

“The lower multipliers mean that properties with a rateable value under £500,000 will receive a lower rate bill with their multiplier being 5 pence in the pound lower than properties in other sectors. For many smaller businesses this will still be much lower than the 40% retail leisure and hospitality relief available in 2025/6 and will also add complexity to the rating system.

“The new multipliers coincide with the 2026 revaluation and, with some businesses facing significant increases because of their new Rateable Values, it is good news that the Government will phase in the most excessive increases by continuing the Transitional Relief scheme.

“However, many businesses in other sectors such as offices and warehouses (along with many larger retail, leisure and hospitality properties such as supermarkets) will be subject to a multiplier of 50.8p in the pound on their business rates from next year. While this is lower than the 2025/6 multiplier of 55.5p, the OBR have forecast that in the next few years, through a mixture of inflation-linked increases and the gradual withdrawal of transitional relief, annual business rates receipts will rise from £33.6bn in 2025/6 to £41bn by 2030.

“Although the multipliers are set to fall in 2026, the upwards trajectory of business rates costs look set to continue in the long term and the calls for reform are likely to continue.”

Our full Budget reaction