The government has made good on its promise to reform the antiquated business rates system – and in the right direction for the business community. While widely praised by the hospitality and amusements industry, they also voiced the existential reality that the benefits “won’t scratch the surface” of the hit businesses are facing with increased costs.

Business rates reform has officially become law after the Non-Domestic Rating Act received royal assent. Last week the government announced that it will introduce two lower multipliers for Retail, Hospitality and Leisure (RHL) properties with rateable values (RVs) below £500,000. These will commence from April 2026 and, it said, “will give long-term certainty and support to the high street, in contrast to the previous RHL relief which created a yearly cliff-edge”.

A major step forward to overhaul the unpopular and antiquated business rates system, the change has been welcomed by industry. 

But there will be some finessing required, not least in the hospitality sector where leaders have urged the government for stronger support.

The new legislation aims to provide relief for hospitality businesses by offering up to 40 percent off rates for properties with a rateable value up to £51,000, funded by higher multipliers on properties with a rateable value of more than £500,000. Kate Nicholls, CEO of UKHospitality, labelled the enactment a “landmark moment”, but urged the government to offer the maximum discount to all properties up to the highest cut-off, and to exempt those over it.

“A permanently lower level of business rates will truly benefit hospitality businesses and, crucially, rebalance a system that has unfairly overtaxed the high street by billions of pounds,” she commented, before reminding the government that the changes “won’t scratch the surface” of the £3.4bn annual cost increases hitting the sector.

Dee Corsi, chair of High Streets UK, believes the reforms, as currently proposed, will place an excessive burden on the UK’s flagship high streets.

“If implemented, the proposed ‘super-tax’ would negatively impact employment and put stores at risk of closure,” she explained

Corsi also called for a freeze in any multiplier increases until after the 2026 revaluation, and joined Nicholls in requesting an exemption of all retail, leisure and hospitality properties from the higher multiplier.