From 1st April 2026, the Government is introducing a new Transitional Relief scheme to help protect businesses with changes in their business rates bills following the 2026 revaluation. Alongside this, a Transitional Relief Supplement will apply to some ratepayers.
What is Transitional Relief
When the Valuation Office Agency (VOA) updates rateable values during a revaluation, some properties may see their business rates bills increase. To reduce the impact of increases and ensure a phased approach, the Government applies Transitional Relief.
The scheme applies only to the bill based on a property at the time of the revaluation.
If you are entitled to transitional protection, it will be calculated automatically and shown on your bill, you do not need to apply.
Further information about transitional arrangements is available at Business rates relief: Transitional relief - GOV.UK (external link).
Under the transitional relief scheme from 1st April 2026, the below caps are in place to ensure increases are phased in gradually over three years, rather than happening immediately.
- Rateable Value (RV) up to 20,000: 5% (2026/27), 10% plus inflation (2027/28), 15% plus inflation (2028/29)
- RV 20,001 to 100,000: 15% (2026/27), 25% plus inflation (2027/28), 40% plus inflation (2028/29)
- RV over 100,000: 30% (2026/27), 25% plus inflation (2027/28), 25% plus inflation (2028/29).
Examples of how transitional relief is calculated are shown below.
Example 1 – Small property (RV 15,000)
- 2025/26 charge: £10,000
- 2026/27 charge following revaluation: £13,000
- This is a 30% increase, but the maximum allowed for this RV band is 5%.
Step‑by‑step calculation:
- Calculate the maximum allowed bill:
£10,000 × 1.05 = £10,500
- Compare allowed bill with new bill:
New bill = £13,000
Allowed maximum = £10,500
- Final bill for 2026/27 year after Transitional Relief: £10,500.
Transitional Relief prevents the bill from jumping straight to £13,000.
Example 2 – Medium property (RV £50,000)
- 2025/26 charge: £40,000
- 2026/27 charge following revaluation: £50,000
- This is a 25% increase
- For this band (£20,001-£100,000), the maximum increase for 2026-27 is 15%.
Calculation:
- Maximum allowed = £40,000 × 1.15 = £46,000
- New bill (£50,000) is higher than allowed (£46,000).
- Final bill after Transitional Relief: £46,000.
Example 3 – Large property (RV £200,000)
- 2025/26 charge: £120,000
- 2026/27 charge following revaluation: £165,000
- Increase = 37.5%
- Cap for this band (over £100,000 RV) is 30%.
Calculation:
- Maximum allowed = £120,000 × 1.30 = £156,000
- New bill (£165,000) exceeds the allowed increase.
- Final bill after Transitional Relief: £156,000.
What is the Transitional Relief Supplement
To help pay for the cost of providing Transitional Relief nationally, the Government is introducing a temporary 1 pence supplement (1p in the pound) on the business rates multiplier for 2026/2027 billing year only.
The supplement only applies to ratepayers who do NOT receive Transitional Relief or Supporting Small Business Relief. If you receive either of those reliefs, you will not pay the supplement.
The Transitional Relief Supplement will show on all bills, including those where the supplement hasn’t been charged. This is a requirement of the regulations. The supplement will not have been used to calculate your charge payable if it is not applicable, as shown below.
If you do NOT qualify for Transitional Relief or Supporting Small Business Relief:
- Your multiplier increases by 1p (e.g. from 43.2p to 44.2p)
- The supplement applies for one year only (2026/27).
If your RV is 30,000, then:
- 1p supplement = £0.01 × 30,000
- Additional amount payable = £300 for the year.
This does not affect new properties brought into the rating list from 1st April 2026 but is applicable to hereditaments that have been created from splits/mergers of an existing hereditament already in the list.