Business rates in England: Could you qualify for a relief or exemption?

With many other expenses increasing, such as national insurance, the burden of business rates is being felt more and more by many businesses. Understanding potential reliefs can make a significant difference to cashflow, particularly for small businesses and those with low profit margins.

Reliefs are administered by local authorities, though the rules for them are set by the government. Below is an overview of the key reliefs, and which businesses can be eligible for them.

The Retail, Hospitality and Leisure Relief is designed to support businesses in these sectors. It was brought in due to the severe impact of the COVID-19 pandemic and is a replacement for the more significant relief given earlier in the pandemic.

For the 2025/2026 rate year, eligible properties receive 40% off their business rates bills, up to a cap of £110,000 per business.
The relief applies only to occupied properties and businesses must meet subsidy control rules to not exceed the cap.  

From April 2026, the relief will be replaced by a lower rate in the pound (multiplier) for eligible RHL properties. The plan beyond then is unclear and will depend on government decisions.

Small Business Rates Relief is available to businesses that occupy a single property with a rateable value of less than £15,000.
The relief works as follows:

• 100% relief is granted for properties with a rateable value of £12,000 or less
• For properties with a rateable value between £12,001 and £15,000, the relief tapers from 100% to 0%

To qualify, the property must be the business’ only or main property. If a business uses multiple properties, the additional ones must each have a rateable value of less than £2,900 and the total value must not exceed £20,000 (£28,000 in London). 

Investment Zones business rate relief are part of the government’s strategy to stimulate growth and innovation.

Businesses setting up high potential industries (such as life sciences, technology and manufacturing), or expanding in designated investment zones, may receive 100% relief from business rates for up to five years for newly occupied business premises or for expanding operations within a designated investment zone. 

Enterprise Zones (EZ) were introduced to foster development in specific areas. Relief includes up to 100% business rates relief, worth up to £275,000 over five years.

Properties must be in an EZ (currently 48 in operation) and be occupied during the designated period. Relief is available for both new businesses and those expanding within the EZ.

Green Energy Relief is available to businesses that generate or store renewable energy or use it primarily for their own operations. Technologies that qualify include solar panels, wind turbines, hydroelectric systems, geothermal energy, biomass and battery storage.

Businesses can receive up to 100% relief on the portion of a property used for renewable energy purposes. To qualify for full relief, at least 50% of the electricity generated must be used on-site by the business. Systems that export energy to the national grid may also be eligible, though relief levels depend on ownership and usage arrangements.

Improvement Relief was introduced to encourage businesses to invest in property upgrades without facing an immediate increase in business rates.

Key features of this relief include that it:

• Provides 12 months of relief from the increased rates resulting from the improvements
• Applies to physical improvements such as structural renovations or expansions
• Is only available for improvements completed from 1 April 2024 onwards and there is a requirement to continue to occupy parts of the property throughout

Businesses may apply for relief if a property is partly occupied for a short time. Examples include:

• A business moving into a property in stages
• Renovation work that prevents use of part of the property

Local authorities have discretion to grant this relief. If approved, rates are charged only on the occupied portion for a limited time. 

Generally, business rates are still payable on empty commercial properties, but some exemptions apply:

• 3 months empty rates relief for most commercial properties, such as offices and retail properties
• 6 months empty rates relief for industrial properties, such as warehouses

After the exemption period, full business rates are usually payable. Longer exemptions may apply in cases where:

• The property is owned by a charity and expected to be used for charitable purposes
• The ratepayer enters some type of insolvency (depending on circumstances)
• The property is unfit for occupation 

In England, a property is required to be occupied for 13+ weeks and then vacated to trigger this relief. The relief in England is currently under review.

Some properties are exempt from business rates, such as agricultural land and buildings, vacant listed buildings and other categories.

Business rates reliefs and exemptions are in place to support businesses, stimulate investment and to ease the financial burden on struggling sectors. Reliefs such as RHL Relief and SBRR offer immediate assistance to businesses, while schemes such as Investment Zone relief, EZ Relief and green reliefs aim to drive long-term growth.

Understanding and utilising these reliefs can lead to significant savings, please do contact a member of the business rates team to discuss further.  

Approval code: NTEH7082540