RHL Business Rates Relief: 2025/26 Scheme Guide
Discover how the Retail, Hospitality and Leisure (RHL) business rates relief works in England for 2025/26, covering the 40% discount, £110,000 cash cap, exclusions, and the 2026/27 transition.
Key Takeaways: RHL Business Rates Relief
- The Retail, Hospitality and Leisure (RHL) relief scheme provides a 40% discount on business rates in England from 1 April 2025 to 31 March 2026.
- The 40% relief for 2025/26 is a reduction from the 75% relief rate that was available to eligible businesses during the 2024/25 tax year.
- A strict national cash cap of £110,000 per business applies across all properties occupied by a single commercial entity in England.
- The relief constitutes a subsidy and is design-capped under the three-year Minimal Financial Assistance threshold of £315,000.
What retail, hospitality and leisure relief is available on business rates in 2025/26?
Eligible occupied commercial properties in England will receive a 40% discount on their business rates bill for the 2025/26 financial year. This 40% statutory reduction applies to business rates liabilities arising from 1 April 2025 to 31 March 2026.
Chancellor of the Exchequer Rachel Reeves confirmed this business rates support measure during the Autumn Budget on 30 October 2024. According to official GOV.UK guidance, this temporary relief scheme provides a funding package worth over £1.5 billion to support high street businesses through the transitional year.
What properties qualify for RHL relief in 2025/26?
To qualify for the 40% relief, an eligible property must be occupied and used wholly or mainly for qualifying retail, hospitality, or leisure purposes. The specific eligibility categories are defined in English law under the Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025 (S.I. 2025/1093).
| Qualifying Sector | Eligible Property Uses |
|---|---|
| Retail | Shops, hire services, and customer services provided to visiting members of the general public. |
| Food & Drink | Restaurants, cafes, pubs, and properties selling food or drink for consumption on or off the premises. |
| Accommodation | Hotels, guest houses, boarding houses, holiday homes, caravan parks, and campsites. |
| Cultural & Leisure | Cinemas, theatres, live music venues, gyms, museums, art galleries, and sports facilities. |
Which businesses are excluded from RHL relief?
Certain types of commercial properties are specifically excluded from receiving the 40% business rates discount under statutory regulations. Properties that are empty or used mainly for services that do not target visiting members of the public are ineligible.
- Financial services, including banks, building societies, cash points, and cash machines.
- Medical or health services, such as veterinary surgeries, dentists, doctors, and opticians.
- Professional offices, including solicitors, accountants, employment agencies, and estate agents.
- Betting shops, pay-day loan shops, and gambling establishments.
- Automotive properties, including car showrooms, petrol filling stations, and motorway service areas.
- Traditional post offices and commercial car parks.
How does the £110,000 cash cap and subsidy limit work?
The 40% business rates discount is subject to a strict financial limit of £110,000 per business across all properties in England. Eligible commercial entities must monitor their total savings to prevent exceeding this statutory cap and the broader subsidy limits.
- Calculate the 40% discount for each eligible property occupied by your business in England.
- Sum the discounted values together to ensure the total cumulative relief does not exceed the national cash cap of £110,000.
- Verify that the business rates relief does not push your business over the general Minimal Financial Assistance (MFA) limit of £315,000.
- Ensure the £315,000 MFA limit is assessed cumulatively over a three-year rolling period including the current 2025/26 financial year.
- Reject the relief for any properties if the combined savings would exceed either the £110,000 cash cap or the £315,000 subsidy threshold.
How is the 40% discount applied to your business rates bill?
The local billing authority will automatically calculate and apply the 40% RHL rates discount to your business rates bill. You do not need to submit a formal application if your property is already correctly categorised and occupied.
Your local council applies the 40% discount sequentially after first deducting any mandatory reliefs, such as Small Business Rates Relief, and any local discretionary discounts. If your billing authority has not automatically awarded the discount on your annual bill, you should contact them directly to request an assessment. Conversely, if you receive the discount but exceed the national cash cap, you must notify your council immediately to opt out.
How do business rates change for RHL properties in 2026/27?
The 40% temporary RHL relief scheme will formally close on 31 March 2026 and will not be extended. From 1 April 2026, the temporary discount is replaced by a permanent system of lower business rates multipliers for qualifying retail, hospitality, and leisure properties.
This permanent support system, established under the Non-Domestic Rating (Multipliers and Private Schools) Act, provides targeted multipliers based on the Rateable Value (RV) of the commercial property. HM Treasury and HMRC published details outlining these three distinct multiplier tiers to fund the ongoing support package.
| Property Rateable Value (RV) | Multiplier Category | 2026/27 Multiplier Rate |
|---|---|---|
| Under £51,000 | Small Business RHL Multiplier | 38.2p |
| £51,000 to £499,999 | Standard RHL Multiplier | 43.0p |
| £500,000 and above | High-Value Multiplier (All Sectors) | 50.8p |
Does my business qualify for RHL relief if we also sell goods online?
Yes, businesses that sell goods online can still qualify for the 40% discount, provided the physical property remains open to the public and is used wholly or mainly to provide goods or services to physical visitors.
Do I need to apply to my council to receive the 40% RHL rates relief?
No, local authorities in England generally apply the 40% RHL relief automatically to your annual business rates bill. You only need to contact your council if the relief is missing or if you need to opt out due to cap limits.
What happens to RHL relief if I exceed the £110,000 cash cap limit?
If you exceed the £110,000 national cash cap or the £315,000 Minimal Financial Assistance limit, you must refuse the excess relief. You must write to your local council to opt out and return any over-awarded discount.
Are post offices and betting shops eligible for the 2025/26 RHL relief?
No, post offices and betting shops are explicitly excluded from the 2025/26 Retail, Hospitality and Leisure relief scheme under statutory guidelines, even if they are open to visiting members of the general public.