Business rates reform: what it means for hospitality, leisure and retail 

From April 2026, the Government will implement one of the most significant changes to the business rates system in decades. This reform is designed to create a fairer, more sustainable framework, but it will have major implications for hospitality and leisure businesses. 

Key changes at a glance 

• Five multipliers instead of two – introducing greater differentiation based on property size and sector. 

• Lower multipliers for smaller firms – easing pressure on small and medium-sized enterprises and supporting local growth. 

• Retail, hospitality and leisure (RHL) properties benefit most – multipliers for qualifying properties will be 5p below the national rates, delivering permanent relief compared to the previous temporary schemes. 

• Higher multiplier for large properties – those with a rateable value of £500,000+ will pay 2.8p above the standard multiplier to fund the cuts. 

Hospitality and leisure: what’s changing? 

The new RHL multipliers replace the temporary 40% relief that has been rolled over annually since the pandemic.  

Eligible pubs, restaurants, hotels, gyms, cinemas and other leisure venues with rateable values under £500,000 will see their bills calculated using the reduced multipliers:  

– small business RHL multiplier: approx. 38.2p 

– standard RHL multiplier: approx. 43.0p 

Transitional relief worth £3.2 billion will cap annual increases for those facing higher bills after the 2026 revaluation. 

Properties that qualify for RHL multipliers but later become vacant will revert to the standard non-RHL multiplier once any empty property relief expires. 

Why it matters 

The hospitality and leisure sector continues to face significant challenges, with an average of two site closures per day reported in the first half of 2025 and mounting cost pressures from rising wages, energy costs and frozen tax thresholds. While the introduction of lower multipliers for these sectors aims to provide permanent relief and stability, businesses will still need to plan carefully to manage these ongoing financial pressures. 

If you require advice or assistance in understanding how these changes affect your business, please feel free to reach out. Here at Birketts, we have a dedicated team of specialists within our hospitality and leisure team who can assist.