Business Rates Relief for Commercial Occupiers: A CRE Broker's Guide

Business rates — the non-domestic equivalent of council tax — are a significant and often underestimated occupancy cost for commercial tenants. For smaller occupiers, rates can rival or exceed rent. For larger industrial and office occupiers, they represent a material fixed cost that affects affordability and location decisions.

A CRE broker who understands the rates relief system, and can explain it to occupier clients, adds tangible value. This article sets out the main reliefs available in England and how they work.

How business rates are calculated

Business rates are calculated by multiplying the rateable value (RV) of the property — set by the Valuation Office Agency (VOA) at each revaluation — by the multiplier set by central government each April.

For 2026/27, the standard multiplier is 55.5p in the pound. A property with an RV of £50,000 produces a rates bill of approximately £27,750 before any reliefs.

Rateable values were last updated at the 2023 revaluation, based on April 2021 rental values. Properties that were incorrectly valued can be challenged through the VOA's Check, Challenge, Appeal (CCA) process.

Main reliefs in England

Small Business Rate Relief (SBRR)

• Available to occupiers with a single property with RV below £15,000 (100% relief for RV below £12,000; tapered between £12,000–£15,000)
• If the occupier has additional properties, they must have an aggregate RV below the applicable threshold
• Applications are made to the local billing authority (the local council)

This relief eliminates rates entirely for the smallest commercial premises and is widely under-claimed.

Retail, Hospitality and Leisure Relief (RHL)

The government has continued to provide targeted relief for retail, hospitality, and leisure properties. For 2026/27, eligible properties receive a reduction in their rates bill, subject to a cash cap per business.

Eligibility covers properties used wholly or mainly for retail sales, food and drink consumption, or leisure activities — including high street shops, restaurants, pubs, gyms, and hotels. Eligible occupiers apply to the local billing authority.

Empty Property Relief

Commercial properties benefit from 100% relief for the first three months of vacancy (six months for industrial properties). After that, the full rate becomes payable.

This is a crucial consideration for landlords managing void units. The three- or six-month clock starts from the date of vacancy. Strategies to artificially reset the clock are increasingly scrutinised by billing authorities, and courts have taken a dim view of arrangements that lack genuine substance.

Mandatory Charity Relief

Premises occupied by registered charities and used wholly or mainly for charitable purposes qualify for 80% mandatory relief. Billing authorities have discretion to grant the remaining 20% (known as top-up relief).

Transitional Relief

Following the 2023 revaluation, transitional relief limits the annual increase in rates bills for properties that saw significant rises in RV. The relief is applied automatically by billing authorities.

Advising occupier clients

When advising a commercial occupier client on a new letting, provide:

1. The current rateable value — search the VOA's public register
2. The estimated rates liability — multiply the RV by the current multiplier
3. Any reliefs that apply — SBRR, RHL, charity relief
4. The rates liability net of reliefs — this is the real cost to the occupier
5. An indication of whether the RV appears accurate — for significant occupiers, a rating surveyor can advise on whether an appeal is worthwhile

Total occupancy cost — rent plus rates plus service charge plus insurance — is what matters to the occupier. A property with lower rent but a high RV may cost more in practice than a comparable property with higher rent and SBRR relief.

Empty rates management for landlord clients

For landlord clients with void units, advise on:

• The three- or six-month empty property relief period and when it expires
• The commercial imperative to re-let or find an occupier within that window
• The risk and reputational exposure associated with artificial occupation arrangements

Where AI helps

AI can:

• Calculate a quick rates estimate from a rateable value and the current multiplier
• Identify which reliefs are likely to apply based on the property type and occupier profile
• Draft a total occupancy cost comparison across multiple properties for a tenant client
• Produce a rates summary for a client briefing note

AI cannot appeal a rateable value (this requires a specialist rating surveyor) or advise definitively on the availability of a specific relief in a complex situation (this requires a billing authority decision or legal advice). But for standard client briefings, AI materially reduces the time needed to calculate and explain rates costs.