Guidance

Business Rates Relief: 2026 Supporting Small Business Relief, local authority guidance

Updated 22 December 2025

Applies to England

Section 1: Business Rates Relief: 2026 Supporting Small Business Relief, local authority guidance

About this guidance

1. This guidance is intended to support local authorities in administering the 2026 Supporting Small Business Relief scheme (2026 SSBR) for the years 2026/27 to 2028/29. This guidance applies to England only.

2. This guidance sets out the criteria for the 2026 SSBR scheme. The guidance does not replace existing legislation.

3. Enquiries on this measure should be addressed to: ndr@communities.gov.uk.

Introduction

4. At the 2025 Autumn Budget the Chancellor announced that the 2026 SSBR scheme will cap bill increases at £800 per year or the relevant caps within transitional relief (whichever is the greatest) for any business losing eligibility for certain reliefs, including Small Business Rate Relief and Rural Rate Relief, at the 2026 revaluation^{[footnote 1]}.

How will 2026 SSBR be provided?

5. For 2026/27 to 2028/29, the government will, in line with the eligibility criteria set out in this guidance, reimburse local authorities that use their discretionary relief powers under section 47 of the Local Government Finance Act 1988, to grant 2026 SSBR.

6. It will be for individual local authorities, which administer the 2026 SSBR, to adopt a local scheme and determine in each individual case when, having regard to this guidance, to grant relief under section 47.

7. Central government will reimburse billing authorities and major precepting authorities for the actual cost to them under the rates retention scheme of the 2026 SSBR that falls within the definitions in this guidance.

Who is eligible for the 2026 SSBR and how much relief will be available?

8. This section describes in principle the 2026 SSBR scheme. Local authorities should use the detailed guidance at section 2 to determine eligibility and calculate bills. 2026 SSBR will help those ratepayers who at the revaluation are seeing large increases in their bills as a result of losing some or all of their:

a. Small Business Rate Relief or Rural Rate Relief,
b. 40% Retail Hospitality and Leisure Relief, and/or
c. 2023 Supporting Small Business Relief.

9. Charities and Community Amateur Sports Clubs, who are already entitled to mandatory 80% relief, are not eligible for 2026 SSBR.

10. To support eligible ratepayers, 2026 SSBR will ensure that the increase in the bills of these ratepayers is limited to £800 per year or the relevant caps within transitional relief whichever is the greater^{[footnote 2]}.

11. For those ratepayers receiving 2023 SSB relief on 31/3/26 (including those also receiving SBRR, Rural Rate Relief and/or RHL Relief on 31/3/26), any eligibility for 2026 SSBR will end on 31 March 2027.  All other eligible ratepayers remain in 2026 SSBR for either 3 years or until they reach the bill they would have paid without the scheme^{[footnote 3]}. A change of ratepayers will not affect eligibility for the Supporting Small Business scheme but eligibility will be lost if the property falls vacant or becomes occupied by a charity or Community Amateur Sports Club.

12. There is no second property test for eligibility for the 2026 SSBR scheme. However, those ratepayers who during 2025/26 lost entitlement to Small Business Rate Relief (because they failed the second property test) but have, under the rules for Small Business Rate Relief, been given a 12 month period of grace before their relief ended (or from 27/11/25 3 years) - can continue on the 2026 SSBR scheme for the remainder of their period of grace.

13. Detailed guidance on eligibility and the value of the Supporting Small Business scheme is at Section 2.

Sequence of reliefs

14. Hereditaments eligible for charity or Community Amateur Sports Club relief or hereditaments which are unoccupied are not eligible for 2026 SSBR. And, for the avoidance of doubt, small business rate relief or rural rate relief should not be applied to further reduce the bill found under 2026 SSBR (to avoid the double counting of relief – see the detailed rules in section 2).

15. For example,

• a non-RHL ratepayer eligible for Small Business Rate Relief whose rateable value has increased from £3,000 (paying £0 in 2025/26) to £14,000 would be paying the following in 2026/27 before 2026 SSBR:

Bill before reliefs (including 1p Transitional Relief Supplement):	£6,188
Bill after transitional relief:	£1,572
Bill after Small Business Rate Relief (@1/3)	£1,048

• After 2026 SSBR the bill for 2026/27 would be reduced to £800. No further Small Business Rate Relief should be applied to the £800 bill.  No addition for Transitional Relief Supplement is made to a bill within SSBR. 

16. The same principle applies to properties for which a Section 44A certificate has been granted (apportionment of rateable values for partly occupied properties). The presence of a section 44A certificate should not further reduce the bill found under 2026 SSBR.

17. All other discretionary reliefs, including those funded by section 31 grants, should be considered after the application of 2026 SSBR.

Subsidy control

18. The 2026 SSBR is likely to amount to a subsidy. Therefore, any relief provided by local authorities under this scheme will need to comply with the UK’s domestic and international subsidy control obligations (See the DBT guidance for public authorities which contains guidance and information for the new UK subsidy control regime.

19. To the extent that a local authority is seeking to provide relief that falls below the Minimal Financial Assistance (MFA) thresholds, the Subsidy Control Act allows an economic actor (e.g. a holding company and its subsidiaries) to receive up to £315,000 in a three-year period (consisting of the 2026/27 year and the two previous financial years). MFA subsidies cumulate with each other and with other subsidies that fall within the category of ‘Minimal or SPEI financial assistance’. Any other subsidies claimed under the Small Amounts of Financial Assistance limit of the Trade and Cooperation Agreement should be counted under the £315,000 allowance.

20. In those cases where it is clear to the local authority that the ratepayer is likely to breach the MFA limit then the authority should automatically withhold the relief. Otherwise, local authorities may include the relief in bills and ask the ratepayers, on a self-assessment basis, to inform the authority if they are in breach of the MFA limit.

21. MFA subsidies above £100,000 are subject to transparency requirements. This is not cumulated per beneficiary but applies per subsidy award. This means that for every individual subsidy provided of more than £100,000, the local authority needs to include details of the subsidy on the subsidy control database. Local authorities will need to create an account to use the Manage UK Subsidies Portal. This will enable users to upload subsidy schemes and awards. To gain access, users must email subsidydatabase@beis.gov.uk.

Recalculations of reliefs

22. As with other reliefs, the amount of SSBR awarded should be recalculated in the event of a change of circumstances. This could include, for example, a backdated change to the rateable value or to the hereditament. This change of circumstances could arise during the year in question or during a later year.

Section 2: Detailed guidance for operation of the 2026 Supporting Small Business Relief (2026 SSBR)

Day 1 Eligibility for the Scheme

23. For 1 April 2026, a hereditament will be eligible for 2026 SSBR where^{[footnote 4]}:

a. the chargeable amount for 31 March 2026 was calculated in accordance with:

i. paragraph 4 of Schedule 4ZA (SBRR not in transitional relief), or
ii. regulation 12(6) of, or paragraph 4(5) or 5(5) of the Schedule to, the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2022 SI 2022 No. 1403 (SBRR within transitional relief), or
iii. paragraph 5 of Schedule 4ZA by virtue of paragraph 8 of Schedule 4ZA (Rural Rate Relief), or
iv. section 47 by virtue of being eligible for schemes introduced by local authorities to deliver:
1. the 2023 Supporting Small Business Relief Scheme as set out in guidance issued by this Department on 21 December 2022, or
2. the 2025/26 Retail, Hospitality and Leisure Scheme as set out in guidance issued by this Department on 16 January 2025, and

b. the hereditament for 1 April 2026 was occupied, and

c. the ratepayer for 1 April 2026 was not a charity or trustees for a charity or a community amateur sports club eligible for relief under paragraph 2 of Schedule 4ZA or regulation 12(5) of, or paragraphs 2(4), 3(4), 4(4) or 5(4) of the Schedule to, the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2026.

24. Where a hereditament meets these criteria then the rules for determining a chargeable amount set out at paragraphs 30 to 50 below will apply provided that the chargeable amount within the 2026SSBR scheme is less than it would otherwise be absent the 2026 SSBR scheme.

Ceasing of eligibility for the scheme after 1 April 2026

25. After 1 April 2026, 2026 SSBR will cease to apply where:

a. the chargeable amount for a day found under 2026 SSBR is the same as or more than the chargeable amount found in the absence of 2026 SSBR. This ensures that where, for example, the increase in the chargeable amount in 2026 SSBR would take the bill above the level it would otherwise have been then the hereditament will drop out of 2026 SSBR. It also ensures that where, for example, with effect from after 1 April 2026, the hereditament becomes eligible for 100% Small Business Rate Relief then they also fall out of 2026 SSBR, or

b. the ratepayer changes to a charity or trustees for a charity or a community amateur sports club eligible for relief under paragraph 2 of Schedule 4ZA or regulation 12(5) of, or paragraphs 2(4), 3(4), 4(4) or 5(4) of the Schedule of the Schedule to, the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2026, or

c. the hereditament for a day is unoccupied, or

d. in respect of days from the 1 April 2027 onwards the hereditament had its chargeable amount for 31 March 2026 found by section 47 by virtue of being eligible for schemes introduced by local authorities to deliver the 2023 Supporting Small Business Relief Scheme as set out in guidance issued by this Department on 21 December 2022.  For the avoidance of doubt, such hereditaments which were also eligible for SBRR/RRR or RHL Relief on 31 March 2026 will also cease to be eligible for 26 SSBR from 1 April 2027.

26. Furthermore, where the ratepayer during 2025/26 lost entitlement to small business rate relief because they failed the 2nd property test but have, under the rules for small business rate relief, been given a 12 month (or from 27/11/25 3 years) period of grace before their relief ended (and therefore was still entitled to small business rate relief on 31 March 2026), then eligibility for 2026 SSBR will cease at the end of that period of grace.

27. Hereditaments which cease to be entitled to 2026 SSBR for a day cannot return to eligibility if their circumstances change from a later day. For example, if a property falls unoccupied it will not then be eligible for 2026 SSBR if it subsequently becomes occupied again.

Eligibility post 1 April 2026 by virtue of a regulation 17 certificate

28. As with the transitional relief scheme, where the valuation officer issues a certificate of rateable value under regulation 17 of the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2026 certifying the correct rateable value at 1 April 2026 (in circumstances where they cannot by rule now amend the list for 1 April 2026) then eligibility for 2026 SSBR and the calculation of 2026 SSBR should be revisited using the regulation 17 certified value in place of the value shown in the list for 1 April 2026. As with the transitional relief scheme, this should have effect as regards the days referred to in regulation 17(4) (the effective date of when the list was altered to correct the inaccuracy and subsequent days) or regulation 17(5) (where no alteration has been made).

29. This ensures that those ratepayers whose compiled list 2026 rateable values are increased by the Valuation Officer but only from the date the list is altered may still be eligible for SSBR from that point onwards. This ensures those ratepayers are not penalised just because the increase in their rateable value was not backdated to 1 April 2026. This follows the same principle which exists in the transitional relief scheme.

Chargeable Amount under the Supporting Small Business Scheme

30. Where 2026 SSBR applies then MHCLG will fund local authorities to apply a chargeable amount under section 47 of the 1988 Act for the period 1 April 2026 to 31 March 2029 found in accordance with the rules in Part 1 to Part 3 of the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2026 (“the 2026 TR Regulations”) subject to the following changes.

Base Liability

31. References in the 2026 TR Regulations to the Base Liability (BL) for 2026/27 should be taken to be the chargeable amount for 31 March 2026 x 365 for the hereditament adjusted as necessary for the assumption that:

i. section 47 did not apply for 31 March 2026 other than where the hereditament was eligible for the 2023 Supporting Small Business Relief Scheme or the 2025/26 Retail, Hospitality and Leisure Scheme,
ii. The ratepayer on 31 March 2026 was not a charity or a CASC,
iii. the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2022 SI 2022 No. 1403 did not apply for 31 March 2026 (the 2023 Transitional Relief Scheme),and
iv. the City of London’s special authority multiplier and small business multiplier for 2025/26 were 55.5p and 49.9p respectively.

32. This ensures the starting BL for hereditaments eligible for 2026 SSBR include the SBRR, rural rate relief, 2023SSBR or 2025/26 RHL relief for 31 March 2026 but assumes there was no transitional relief or charity relief^{[footnote 5]}.  The assumption for the City of London ensure that the additional supplement on the multiplier charged in the City is not also rolled into the BL.

33. Where as a result of the subsidy control limits the amount of RHL relief awarded for 31 March 2026 for a hereditament is less than 40% then the 2026/27 BL for that hereditament should reflect the actual level of RHL relief awarded for 31 March 2026^{[footnote 6]}.

34. Where a certificate has been issued under regulations 18 or 19 of the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2026 then BL for 2026/27 should be found in line with the above but on the assumption that the rateable value in the rating list was the rateable values as certified.

35. References in the 2026 TR Regulations to BL for 2027/28 and 2028/29 should be taken to be references to “(BL x AF) or (BL + 800) whichever is the greater” from the year immediately preceding the year concerned.

Recalculation of chargeable amount for 31/3/26 for the purposes of BL in the 2026 SSBR Scheme

36. Where a hereditament which is eligible for 2026 SSBR was receiving transitional relief on 31 March 2026 it will, therefore, be necessary, for the purposes of determining BL in the 2026 SSBR scheme, to recalculate the chargeable amount for 31 March 2026 on the assumption that transitional relief did not apply.

37. For those ratepayers receiving SBRR, Rural Rate Relief and/or RHL relief on 31/3/26 (but not 23 SSBR), this recalculation for 31/3/26 will give a different figure to the actual chargeable amount.  This is because all of those reliefs apply a set percentage relief to the sum after transitional relief – i.e. they are “top down” reliefs.

38. The same is not true for those receiving 2023 SSBR on 31/3/26.  2023 SSBR is a “bottom up” calculation where the chargeable amount is found by increasing the liability for the previous year (in that scheme by £600).  Transitional relief therefore has no bearing upon the final chargeable amount of a bill found by 2023 SSBR.  In these cases, recalculating the 31/3/26 bill ignoring transitional relief gives the same result.  The value of the 2023 SSBR will just compensate for the loss of transitional relief to deliver the same outcome for 31/3/26.  This is as intended.

39. The tables in Annex A take a property with a set of unchanged rateable value parameters and the 6 combinations of eligible reliefs and shows how the calculation of the BL for 26/27 in 26 SSBR and the 26 SSBR bill is found in each case.

Calculation of Chargeable Amount

40. References in the 2026 TR Regulations to “(BL x AF)” should be taken to be references to “(BL x AF) or (BL + 800) whichever is the greater. This ensures the bill increase is the greater of £800 or the increase under the caps in the transitional relief scheme.

41. Regulations 12(6) & (7) of the 2026 TR Regulations should be assumed to have been omitted. This ensures SBRR is not also applied to the capped bill in 2026 SSBR. This avoids double counting of relief if the hereditament is in the SBRR taper.

42. No change is made to the meaning of NCA from that in the 2026 TR Regulations.  Therefore, as with the 2026 TR Regulations, the Transitional Relief Supplement in 2026/27 will be added to NCA.  Again, as with the 2026 TR Regulations, there should be no separate addition to bills for hereditaments eligible for 2026 SSBR such that, for example, an eligible ratepayer losing their 100% SBRR on 1 April 2026 would under the 2026 SSBR scheme pay £800 in 2026/27 and not £800 plus the Transitional Relief Supplement.

43. Regulation 6 (special authorities) will apply as normal under 2026 SSBR. This ensures ratepayers in the City of London continue to pay any additional amount attributable to the City multiplier.

44. For the avoidance of doubt, the rules for changes in rateable value with effect from after 1 April 2026 (regulation 13) will continue to apply as normal subject to the amendments above. This ensures that, for example, later increases in rateable value are paid in full in the normal way^{[footnote 7]}.  As with the main transitional relief scheme, references to the rateable value in the list should, if the hereditament is eligible for Improvement Relief, be taken to be references to the rateable value less the value of the Improvement Relief certificate.

Splits and mergers

45. Hereditaments will be eligible for 2026 SSBR where they have:

a. come into existence because of the circumstances described in paragraph 1 of the 2026 TR Regulations, and

b. where one of the hereditaments from which the new hereditament was formed in whole or in part was for the day immediately before the creation day eligible for 2026 SSBR.

46. 2026 SSBR will not apply or cease to apply to splits and mergers in the circumstances described in paragraph 28 above (Ceasing of eligibility for the scheme after 1 April 2026).

47. The number of hereditaments eligible for 2026 SSBR which then split or merge is likely to be small and devising rules in particular for mergers with properties outside of 2026 SSBR would be complex. Therefore, as with the previous SSBR schemes, the government has concluded it would be disproportionate to devise detailed rules to prescribe the chargeable amounts in the various circumstances which could arise from a split or a merger.

48. Instead, for hereditaments meeting the criteria above, MHCLG will fund local authorities to apply a chargeable amount under section 47 of the 1988 Act found in accordance with the following principle:

a. that the protection offered by 2026 SSBR (that the bill will not rise by more than £800 p.a. or the transitional reliefs caps whichever is the greater) will continue to apply in principle to that part of the newly created hereditament which was immediately before the creation day in 2026 SSBR, and

b. that increases (or reductions) in overall rateable value arising from the split or merger are not subject to the protection of 2026 SSBR.

49. For simple splits of hereditaments previously eligible for 2026 SSBR, authorities may wish to simply apportion the chargeable amount in the SSB scheme for the hereditament before the split in line with the change in rateable value from the split (i.e. in line with the principle in the Schedule of Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2026).

50. For mergers and reorganisations, authorities will have to estimate the degree to which, in line with the principle of the 2026 SSBR scheme, that part of the hereditament which was formerly eligible for 2026 SSBR should continue to receive support under the 2026 SSBR scheme. MHCLG does not expect authorities to seek any formal apportionments of the rateable value for this purpose.

1. Prior to the Business Rates Supplement and the premium applied to the City of London multiplier. Changes in the additional amounts paid through these supplements are outside the transitional relief scheme and the 2026 SSBR and paid in full. ↩

2. Prior to the Business Rates Supplement and the premium applied to the City of London multiplier. Changes in the additional amounts paid through these supplements are outside the transitional relief scheme and the 2026 SSBR and paid in full. ↩

3. This will be the bill in the main transitional relief scheme or the ratepayer’s full bill.  ↩

4. Unless otherwise stated, references are to the Local Government Finance Act 1988  ↩

5. It is possible in theory that a hereditament eligible for RHL on 31/3/26 is occupied by charity/CASC but in different non-charity occupation on the 1/4/26.  This rule will ensure in such a case (likely to be rare) then the BL would not include the charity relief.   ↩

6. This guidance assumes that where subsidy control has reduced the level of RHL relief then this reduction has been made evenly across all days of 2025/26 and, therefore, reflected on 31 March 2026.  If, in practice to comply with subsidy control, the BA have awarded relief for only part of the year and not 31 March then the BA may adjust the BL for 2026/27 to reflect the level of RHL which would have been applicable for 31 March 2026 had the relief been awarded evenly across the year.      ↩

7. In the 2026 TR Regulations, increases in rateable value above the level at 1 April 2026 are paid in full based on the applicable multiplier for the day M plus in 2026/27 the Transitional Relief Supplement. ↩