How Much Will the UK Collect From Business Rates in 2026‑27?

Government set To Boost Business Rate Relief, Especially for Pubs

London, United Kingdom – The United Kingdom Government is preparing to expand its support package for businesses facing rising property taxes, with particular attention expected to be given to the hospitality sector, especially pubs. The move comes as businesses grapple with increasing financial pressures, and seeks to alleviate the burden of Business Rates.

Understanding Business Rates

Business Rates are a tax on non-domestic properties – that’s any commercial property used as a place of business. They are a meaningful source of revenue for the Government, ranking as the sixth-largest, bringing in an estimated £33.6 billion in 2026-27, projected to rise to £41.9 billion by 2029-30, according to the Office for Budget responsibility. the funds collected contribute towards local services.

Current Support and Proposed Expansion

In a recently announced budget,the Government initially allocated £4.3 billion over the next three years to cap increases in business rate bills for most firms at 15%. Now, officials are considering an increase to this relief package. While the details remain unconfirmed, the focus is likely to broaden the scope of support and potentially extend its duration.

The hospitality industry,especially pubs,are anticipating a significant portion of this expanded relief. this comes amid ongoing concerns about the financial viability of pubs, facing challenges from rising costs and changing consumer habits. According to a recent report by the British Beer & Pub Association, over 500 pubs closed their doors permanently in the first half of 2024 alone.

How Business Rates Compare to Other Tax Revenues

Revenue Source	approximate Contribution (Rank)
Income Tax	1st
National Insurance	2nd
VAT (Value Added tax)	3rd
Corporation Tax	4th
Council Tax	5th
Business Rates	6th

The Government’s initial support package, designed to mitigate the impact of property value revaluations, aimed to provide some stability for businesses. However, many argue that the level of relief was insufficient, particularly for those in sectors heavily impacted by economic headwinds.

The Impact of Revaluation

Business Rates are typically calculated based on the ‘rateable value’ of a property, which is an estimate of its annual rental value.A recent revaluation of properties,the first in seven years,has led to significant increases in rateable values for many businesses,which translates directly into higher tax bills.

Several industry groups have called for more thorough reforms to the business Rates system to ensure it is fair and enduring.These proposals include linking rateable values more closely to actual rental income and introducing measures to support businesses investing in property improvements.

What impact do you think this increased support will have on the long-term viability of local pubs? And will this be enough to alleviate the broader pressures faced by businesses across the UK?

Further details regarding the expanded relief package are expected to be announced in the coming weeks. This will provide clarity on which businesses will benefit, to what extent, and for how long.

What amount is the UK expected to collect in business rates for the 2026‑27 fiscal year?

How Much Will the UK Collect From Business Rates in 2026‑27?

Business rates are a crucial revenue stream for local authorities across the UK, funding essential public services. Understanding the projected collection figures for 2026-27 is vital for businesses, investors, and policymakers alike. While a precise figure is difficult to pinpoint this early in the year, we can build a robust estimate based on recent announcements and ancient data.

Understanding the 2026 Revaluation Impact

The most significant factor influencing business rates collection in 2026-27 is the property revaluation taking effect from April 1st, 2026. this revaluation, the first since 2023, will update rateable values to reflect current property market conditions.

* What dose this mean? Properties whose values have increased since 2023 will see thier business rates bills rise, while those that have decreased may see a reduction.

* impact on Collection: The overall effect on national collection is anticipated to be an increase, driven by general property value inflation over the past three years. Though, the distribution of this increase will be uneven, with some regions and sectors facing larger rises than others.

Historical Business Rates Collection Data

Looking at past trends provides a baseline for forecasting. Here’s a snapshot of recent business rates collection in England (data for Scotland, Wales and northern Ireland varies):

* 2023-24: Approximately £25.3 billion collected in England.

* 2024-25 (estimated): Around £26.5 billion,reflecting modest growth.

* 2025-26 (projected): Estimates ranged between £27.5 – £28 billion, anticipating the impact of economic conditions.

These figures demonstrate a generally upward trend, though subject to economic fluctuations.

Estimating 2026-27 Collection: A Realistic Range

Considering the 2026 revaluation and current economic forecasts, a realistic estimate for total business rates collection in the UK for 2026-27 falls between £29 billion and £31 billion.

Several factors contribute to this range:

1. Inflation: Continued, albeit moderating, inflation will push up rateable values.
2. Economic Growth: The strength of the UK economy will influence business activity and, consequently, rateable values.
3. Retail Sector Challenges: The ongoing challenges faced by the retail sector (online shopping, cost of living crisis) could lead to downward pressure on rateable values for some properties.
4. Government Policy: Any further changes to business rates policy announced throughout 2026 will directly impact collection figures. The Autumn budget announcement in November 2025 already signaled changes were coming.

Regional Variations in Business Rates

Business rates collection isn’t uniform across the UK.Significant regional disparities exist:

* London & South East: Historically contribute the largest share of business rates revenue due to higher property values. Expect continued dominance, but perhaps moderated by economic slowdowns in certain sectors.

* North West, Yorkshire & Humber, and the North East: Generally have lower rateable values and contribute a smaller proportion of overall collection. The revaluation could see a proportionally larger increase in rates for businesses in these regions if property values have risen significantly.

* Scotland, Wales & Northern Ireland: Operate their own business rates systems, with varying rates and relief schemes. Collection figures will be determined by their respective economic conditions and policy decisions.

Impact of Business Rates Relief Schemes

Various business rates relief schemes are in place to support specific sectors and businesses. These schemes reduce the amount of business rates payable, impacting overall collection.

* Retail, Hospitality and Leisure Relief: This scheme, periodically offered, provides temporary relief to businesses in these sectors. Its continuation or modification will influence collection.

* Small Business Rate Relief (SBRR): Provides significant relief to small businesses,reducing their rates burden.

* Empty Property Relief: Offers relief to owners of unoccupied properties, incentivizing them to bring properties back into use.

The availability and scope of these relief schemes will directly affect the total amount of business rates collected.

Practical Tips for Businesses

Understanding the upcoming changes to business rates is crucial for effective financial planning. Here are some practical tips for businesses:

* Check Your Rateable Value: Once the new rateable values are published, verify your property’s assessment.

* Appeal if Necessary: If you believe your rateable value is inaccurate, you have the right to appeal.

* Explore Relief Options: Investigate whether your business is eligible for any available relief schemes.

* Budget Accordingly: Factor potential increases in business rates into your financial forecasts.

* Seek Professional Advice: consult with a qualified surveyor or business rates specialist for tailored guidance.

Case Study: The Impact of Revaluation on a High Street Retailer

A national high street retailer with multiple properties across England experienced a significant increase in its business rates bill following the 2017 revaluation. While some properties saw modest increases,others,located in rapidly gentrifying areas,faced substantial rises. The retailer successfully appealed the valuations of several properties, demonstrating the importance of actively reviewing and challenging rateable values.This case highlights the potential