From 1 April 2026, business rates in England moved to a new five-multiplier system, changing how liabilities are calculated for different types of commercial property. For occupiers, this is more than a technical reform: it could materially affect operating costs, budget forecasts and property strategy.
The impact will vary significantly by property type, rateable value and use class. Smaller retail, hospitality and leisure premises are set to benefit from lower permanent multipliers, while larger and higher-value properties may face increased costs.
What changed this month?
The current business rates system was replaced by a more detailed structure that separates properties by use and value. Instead of one standard multiplier and one small business multiplier, England moves to separate rates for small and standard retail, hospitality and leisure properties, standard non-retail properties, and high-value properties above £500,000 RV.
In practice, that means occupiers will no longer be treated as a single broad group. A town-centre café, a logistics unit and a large office building may all now sit in different multiplier bands, with different cost outcomes.
Which occupiers could benefit?
Retail, hospitality and leisure occupiers are the clearest winners in principle. The new structure introduces lower permanent multipliers for qualifying smaller and standard RHL properties, replacing the temporary relief approach that has supported these sectors in recent years.
That is welcome news for businesses already under pressure from wage growth, energy costs and cautious consumer spending. For many operators, a lower rates bill could ease margin pressure and support investment in staffing, fit-out or expansion.
Where costs could rise
The picture is less positive for larger occupiers, particularly those with higher rateable values. Properties at £500,000 RV and above will move into a higher multiplier band, which will likely increase the annual liability even before any revaluation effect is taken into account. That means some businesses could face a dual cost increase: a higher rateable value from the 2026 revaluation, plus a less favourable multiplier. For portfolio-heavy businesses, that makes early review essential.
Why this matters for occupier strategy
Business rates are not an isolated cost. They sit alongside rent, service charge, insurance and fit-out costs, and can influence everything from location decisions to lease negotiations. For occupiers, the key issue is not simply whether rates go up or down overall, but how the changes affect individual assets. A business with multiple sites may find that some locations become more viable, while others become harder to justify.
What occupiers should do now
Businesses should start by reviewing their full estate against the new multiplier bands and expected 2026 valuations. That includes checking property use, rateable value, floor area and any assumptions that may affect liability.
It is also sensible to stress-test budgets now rather than waiting for the new bills to land. Early modelling can help occupiers understand which assets are likely to remain competitive and where there may be scope to challenge, reconfigure or rationalise space.
Advisory takeaway
The new business rates multipliers could create a more uneven cost landscape across the commercial property market. Some occupiers will benefit from lower permanent liabilities, but others may see a significant increase in occupation costs.
For landlords, occupiers and asset managers alike, the priority is clear: understand the impact as soon as possible, review exposure by property, and plan ahead.
Dunlop Heywood can help occupiers assess their business rates exposure, identify risk across portfolios and plan for the impact of the recent April 2026 changes. The team can also review whether a property may be sitting in the wrong band or whether there is scope to reduce liability through a detailed rates review. Contact the team here.
