Local government finance circular 7/2026: non-domestic rates relief guidance
General information relating to current arrangements for non-domestic rates reliefs in 2026 to 2027.
Annex E: Revaluation transitional reliefs worked examples
Example 1
RV in 2025-26 was £20,000; the property was not in receipt of a transitional relief, hospitality relief, Small Business Bonus Scheme relief or rural relief.
Base liability for 2025-26 was £20,000 x 0.498 = £9,960.
RV in 2026-27 of £25,000.
Gross bill for 2026-27: £25,000 x 0.481 = £12,025
The cumulative Revaluation Transitional relief cap for a medium property (with an RV on 1 April 2026 between £20,001 and £100,000) is 30%, which is greater than the 20.73% increase in gross bill (12,025/9,960 - 1 = 20.73%), and therefore does not apply in this case.
Example 2
RV in 2025-26 is £20,000; the property was not in receipt of a transitional relief, hospitality relief, Small Business Bonus Scheme relief or rural relief.
Base liability for 2025-26 was £20,000 x 0.498 = £9,960.
RV in 2026-27 of £35,000.
Gross bill for 2026-27: £35,000 x 0.481 = £16,835.
The cumulative Revaluation Transitional relief cap for a medium property (with an RV on 1 April 2026 between £20,001 and £100,000) is 30%, which is lower than the 69.03% increase in gross bill (£16,835/£9,960 - 1 = 69.03%), and therefore applies in this case.
Revaluation Transitional relief reduces the bill by £3,887 from £16,835 to £12,948 (£9,960 x 1.3 = £12,948).
Example 3
RV in 2025-26 is £55,000; the property was not in receipt of a transitional relief, hospitality relief, Small Business Bonus Scheme relief or rural relief.
Base liability for 2025-26 based on 31 March 2026 was £55,000 x 0.554 = £30,470.
RV in 2026-27 of £110,000.
Gross bill for 2026-27: £110,000 x 0.548 = £60,280.
The cumulative Revaluation Transitional relief cap for a large property (with an RV on 1 April 2026 over £100,000) is 50%, which is lower than the 97.83% increase in gross bill (£60,280/£30,470 - 1 = 97.83%), and therefore applies in this case.
Revaluation Transitional relief reduces the bill by £14,575 from £60,280 to £45,705 (£30,470 x 1.5 = £45,705).
Example 4
The property is a merger of two old entries.
RV in 2025-26 of £30,000 and £40,000; total gross bill for 2025-26 of £34,860.
((£30,000 x 49.8p) + (£40,000 x 49.8p)). Neither property was in receipt of a relief in 2025-26.
RV in 2026-27 of £240,000.
Gross bill for 2026-27 of £131,520 (£240,000 x 0.548p).
The Revaluation Transitional Relief cap to be applied is 50% (large property, with an RV on 1 April 2026 above £100,000), which is lower than the 277.28% increase in gross bills (£131,520/ £34,860 -1 = 277.28%), and therefore applies in this case.
Revaluation Transitional relief reduces the bill by £79,230 from £131,520 to £52,290 (£34,860 x 1.5 = £52,290).
Example 5
RV of a mainland shop where the ratepayer had only on property in 2022-23 was £14,000 and as the RV was no more than £15,000, it was in receipt of 100% Small Business Bonus Scheme with a net bill of £0.
On 1 April 2023 the RV rose to £70,000 and did not change until 1 April 2026. The property lost all entitlement to SBBS relief on 1 April 2023 and was not in receipt of any hospitality relief in 2025-26 as the RV was more than £51,000.
Gross bill in 2025-26: £70,000 x 0.554 = £38,780.00.
The Bill in 2025-26 was however capped by 2023 Small Business Transitional Relief as the property was in receipt of SBBS relief on 31 March 2023 and the net bill was therefore £1,800.
RV in 2026-27 of £99,000.
Gross bill for 2026-27: £99,000 x 0.535 = £52,965.00.
The Revaluation Transitional Relief cap to be applied is 30% (large property, with an RV on 1 April 2026 from £51,001 to £100,000), which is lower than the 36.58% increase in gross bills (£52,965/ £38,780 -1 = 36.58%), and therefore applies in this case.
Liability in 2026-27: £38,780.00 x 1.3 = £50,414.00 which is a £2,551.00 reduction in the liability compared to the gross liability for 2026-27.
The property qualifies for 15% Retail, Hospitality and Leisure relief in 2026-27 as its RV is no more than £100,000 and this applies to the bill after Revaluation Transitional Relief is applied, so the pre-Small Business Transitional Relief bill is £50,414 x (1 – 0.15) = £42,852.
This is an increase of £42,852 - £1,800 = £41,052 between 2025-26 and 2026-27.
It also qualifies for 2026 Small Business Transitional Relief capping bill increases at 25%, as it was in receipt of 2023 Small Business Transitional Relief on 31 March 2026.
Therefore the net bill in 2026-27 is: £1,800 + (£41,052 x 0.25) = £1,800 + £10,263 = £12,063.
Example 6
The property is a self-catering property. The RV in 2025-26 is £110,000; the property was not in receipt of a transitional relief, hospitality relief, Small Business Bonus Scheme relief or rural relief.
Base liability for 2025-26 was £110,000 x 0.568 = £62,480.
RV in 2026-27 of £135,000.
Gross bill for 2026-27: £135,000 x 0.548 = £73,980.
The cumulative Revaluation Transitional relief cap for a self catering property is 15%, which is lower than the 18.4% increase in gross bill (£73,980/£62,480 - 1 = 18.4%), and therefore applies in this case.
Revaluation Transitional relief reduces the bill by £2,128 from £73,980 to £71,852 (£62,480 x 1.15 = £71,852).
Example 7
RV of a mainland hotel where the ratepayer had only on property in 2022-23 was £14,000 and as the RV was no more than £15,000, it was in receipt of 100% Small Business Bonus Scheme with a net bill of £0.
On 1 April 2023 the RV rose to £70,000 and did not change until 1 April 2026. The property lost all entitlement to SBBS relief on 1 April 2023 and was not in receipt of any hospitality relief in 2025-26 as the RV was more than £51,000.
Gross bill in 2025-26: £70,000 x 0.554 = £38,780.00.
The Bill in 2025-26 was however capped by 2023 Small Business Transitional Relief as the property was in receipt of SBBS relief on 31 March 2023 and the net bill was therefore £1,800.
RV in 2026-27 of £99,000.
Gross bill for 2026-27: £99,000 x 0.535 = £52,965.00.
The Revaluation Transitional Relief cap to be applied is 30% (large property, with an RV on 1 April 2026 from £51,001 to £100,000), which is lower than the 36.58% increase in gross bills (£52,965/ £38,780 -1 = 36.58%), and therefore applies in this case.
Liability in 2026-27: £38,780.00 x 1.3 = £50,414.00 which is a £2,551.00 reduction in the liability compared to the gross liability for 2026-27.
The property qualifies for 15% Retail, Hospitality and Leisure relief in 2026-27, and for 25% licensed hospitality relief, as its RV is no more than £100,000 and this applies to the bill after Revaluation Transitional Relief is applied, so the pre-Small Business Transitional Relief bill is £50,414 x (1 – 0.15 – 0.25) = £30,248.40.
This is an increase of £30,248.40 - £1,800 = £28,448.40 between 2025-26 and 2026-27.
It also qualifies for 2026 Small Business Transitional Relief capping bill increases at 25%, as it was in receipt of 2023 Small Business Transitional Relief on 31 March 2026.
Therefore the net bill in 2026-27 is: £1,800 + (£28,448.40 x 0.25) = £1,800 + £7,112.10 = £8,912.10.
Example 8
In 2025-26 a hotel on the mainland has an RV of £135,000 and a gross bill of (£135,000 x 0.568) = £76,680.00.
RV increases to £216,000 at the 2026 Revaluation. The gross bill in 2026-27 is therefore (£216,000 x 0.548) = £118,368.00. As the property’s gross liability has increased by 54% and this is more than the Revaluation Transitional Relief (RTR) cap for properties with RV of more than £100,000, it benefits from RTR.
This limits the increase in the bill in 2026-27 to 50% relative to the property’s 2025-26 gross bill (£76,680 x 1.5) = £115,020.00.
As the property’s RV is more than £100,000 it is not eligible for Retail, Hospitality and Leisure relief or the additional relief for licensed properties. In addition, as it was not eligible for Hospitality relief, Small Business Bonus Scheme or Small Business Transitional Relief (SBTR) in 2025-26, it is not eligible for SBTR in 2026-27.
The net bill for 2026-27 is therefore £115,020.
Example 9
A restaurant has an RV of £82,500 in 2025-26 and a gross bill of (£82,500 x 0.554)=£45,705.00.
RV increases to £127,000 at the 2026 Revaluation and the gross bill in 2026-27 is (£127,000 x 0.548) = £69,596.00.
As the property’s gross liability has increased by 52% and this is more than the Revaluation Transitional Relief (RTR) cap for properties with RV of more than £100,000, it benefits from RTR. This limits the increase in the bill in 2026-27 to 50% relative to the property’s 2025-26 gross bill (£45,705 x 1.5) = £68,557.50.
As the property’s RV is more than £100,000 it is not eligible for Retail, Hospitality and Leisure relief or the additional relief for licensed properties. In addition, as it was not eligible for Hospitality relief, Small Business Bonus Scheme or Small Business Transitional Relief (SBTR) in 2025-26, it is not eligible for SBTR in 2026-27.
The net bill for 2026-27 is therefore £68,557.50.
Example 10
A business operates two venues, a pub and a restaurant with RVs in 2025-26 of £32,000 and £52,000 respectively. The gross bill for the pub in 2025-26 was (£32,000 x 0.498) = £15,936.00 and the gross bill for the restaurant was (£52,000 x 0.554) = £28,808.00.
As the RV of the pub was no more than £51,000 it was eligible for 40% Hospitality relief, reducing its bill to (£15,936 x (1-0.4))= £9,561.60. As the restaurant’s RV was over £51,000 it was not eligible for Hospitality relief in 2025-26.
The 2025-26 net bills for the pub and restaurant respectively were therefore £9,561.60 and £28,808.00.
At the 2026 Revaluation, the pub’s RV increases to £46,500 and the restaurant’s RV increases to £61,000. The 2026-27 gross bills for the pub and restaurant respectively are (£46,500 x 0.481) = £22,366.50 and (£61,000 x 0.535) = £32,635.00.
As the gross bill for the pub has increased by more than the Revaluation Transitional Relief (RTR) cap for properties with RV more than £20,000 and no more than £100,000. This limits the increase in its bill by 30% relative to its 2025-26 gross bill (£15,936 x 1.3) = £20,716.80. As the increase in the gross bill for the restaurant relative to its 2025-26 gross bill is less than the RTR cap for properties with its RV it does not benefit from RTR.
As both properties’ RVs are no more than £100,000, they are eligible for 15% Retail, Hospitality and Leisure (RHL) relief and a further 25% relief due to them being licensed hospitality properties. As the total value of RHL relief across the businesses’ two properties is no more than £110,000, they each benefit from the maximum 40% relief. This reduces the pub’s bill to (£20,716.80 x (1-0.4)) = £12,430.08 and the restaurant’s bill to (£32,635 x (1-0.4)) = £19,581.00.
As the pub was awarded Hospitality relief in 2025-26 and its bill before Small Business Transitional Relief (SBTR) is higher than its 2025-26 net bill it is eligible for SBTR in 2026-27. This reduces the increase in the net bill in 2026-27 to 25% of what it otherwise would have been ((£12,430.08 - £9,561.60) = £2,868.48 x 0.25) = £717.12.
The 2026-27 net bill for the pub is therefore (£717.12 + £9,561.60) = £10,278.72. The restaurant is not eligible for SBTR in 2026-27 so its net bill is £19,581.00.