Business Rates Explained: A Guide for Commercial Landlords
Written by Scott Jones, founder of CommercialPropertyKiln · Last updated
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Business rates are the tax on non-domestic property. If you own or let commercial premises in England, this is how the bill is worked out and who pays it.
How the bill is calculated
Two numbers make your bill: the rateable value and the multiplier.
The rateable value (RV) is set by the Valuation Office Agency (VOA). It is the VOA's estimate of the annual rent the property could have been let for at a fixed valuation date. For the rating list that took effect on 1 April 2026, that date is 1 April 2024.
The multiplier is set by central government each year. You multiply the rateable value by the multiplier to get the gross annual charge, then apply any reliefs.
Who is liable
The occupier is normally liable for business rates, not the landlord. On a standard commercial letting the tenant pays the bill directly to the council. As a landlord you become liable in two situations: when you occupy the property yourself, and when it is empty, once the rate-free void period has run out.
That empty-property exposure is the one that catches landlords out, so it is worth modelling before a lease ends. See our guide to empty property rates.
The 2026 five-multiplier system
From 1 April 2026 there are five multipliers rather than two, so the rate you pay depends on both the size of the rateable value and whether the property is retail, hospitality or leisure. The full rate card is in our guide to the 2026 multipliers, and the 2026 revaluation explains what changed and why.
Reliefs and checking the bill
The bill is often reduced by relief: Small Business Rate Relief, retail, hospitality and leisure relief, charitable relief, transitional relief after a revaluation, and improvement relief on works. Always check your rateable value is right, and see the full set of mitigation strategies.
Estimate your bill
Our Business Rates Calculator applies the correct multiplier for your rateable value and use class, models Small Business Rate Relief, and works out your exposure on an empty property.
This is general guidance, not a formal valuation. Your rateable value and any reliefs should be confirmed with the VOA or a rating surveyor.
Who pays business rates, the landlord or the tenant?
On a standard commercial letting the occupier pays the business rates directly to the council, not the landlord. You become liable when you occupy the property yourself, or when it is empty once the rate-free window has run out.
How are business rates worked out?
You multiply the rateable value set by the Valuation Office Agency by the multiplier set by government, then apply any reliefs. For 2026/27 there are five multipliers depending on the rateable value and whether the property is retail, hospitality or leisure.
Can I reduce my business rates bill?
Yes. Check the rateable value is correct and challenge it if not, claim any relief you are entitled to such as Small Business Rate Relief, and manage empty-property exposure carefully. See the guide to business rates mitigation.