Retail, Hospitality & Leisure Relief is Changing: What You Need to Know

Business rates have always been a major cost for high street businesses, but since the pandemic, the government’s Retail, Hospitality and Leisure (RHL) Relief scheme has offered much-needed support. By significantly reducing business rates bills for eligible properties, the scheme has helped thousands of shops, restaurants, pubs, gyms and other venues stay afloat through a tough few years. 

However, that support is now being scaled back. While businesses received a 75% discount on their business rates in 2023/24 and 2024/25, this was reduced for the current financial year to 40%. With many companies already feeling the financial strain, further changes are set to come into place for the 2026/27 financial year. 

In this blog, we’ll break down exactly what’s changing, who will be affected and what you can do to manage the impact. Whether you operate a single site or a growing chain, planning ahead will be key to minimising your liability as RHL Relief winds down. 

Who Will Be Affected? 

The changes to RHL Relief will have a wide-reaching impact across the high street, particularly for businesses that have relied on this support to manage their operating costs. The sectors most affected include: 

• Retailers  

• Pubs and bars 

• Restaurants and cafés 

• Hairdressers and beauty salons 

• Gyms and fitness studios 

• Cinemas and entertainment venues 

What’s Changing and When? 

For the past few years, businesses in eligible sectors have benefited from a generous 75% discount on their business rates bills, which has been vital during recent economic pressures. But from April 2025, this dropped to just 40%, significantly increasing costs for many high street operators. 

Looking ahead to 2026/27, the government has announced a more permanent structural change. Rather than continuing the RHL Relief as an annual scheme, qualifying businesses will benefit from a new lower business rates multiplier; a move toward embedding long-term support directly into the rating system. 

To put that in context: 

• The current small business multiplier is 0.499 

• Under the new rules, eligible businesses will benefit from a multiplier up to 0.2 lower, so based on the current multiplier, the lowest the multiplier could be is 0.299 

• This effectively mirrors the 40% relief available in 2025/26, but without a cap 

While this may sound like good news, it's worth noting that this new system is being funded by a higher multiplier applied to properties with a rateable value over £500,000. The idea being that large distribution warehouses used by online giants such as Amazon will typically have a rateable value in this range.  

This decision has been criticised as it has no protections for properties not used by these online giants, with particular note that larger retail properties and many public service buildings, such as schools and police stations, will be liable for an increased rate. If you’re want to know how that element of reform could affect larger sites, check out our earlier post: Adapting to Change: The Future of Business Rates for High Street Shops. 

Overall, the transition from capped relief to permanent multipliers marks a major shift in how support for retail, hospitality and leisure is delivered. Businesses should prepare for the difference in both structure and impact. 

Strategies to Manage the Impact 

Here are some key steps to consider: 

• Check for other reliefs: Some properties may be eligible for additional schemes, so have a look at the government outlines gov.uk/guidance/business-rates-relief. 

• Review your rateable value: Have you made any alterations to your property? Has there been any disruptions affecting footfall to your business? Is your rateable value reflective of the rent you pay? All of these considerations could impact your rateable value and how much you’re paying 

• Plan for 2026: The next financial year will not only see a change to how relief is provided but also bring with it a revaluation of every property. Budget for the long term and seek professional guidance to forecast how changes to retail support and the revaluation might impact your business. 

  
  

As Tom Perry (Holloway Bond Director) notes "It is never a bad idea to be prepared for what is to come; if you’re concerned about how much you are paying now or what you may be paying in the future, then the best thing to do is ask an expert. "

Early planning and informed decision-making will help minimise the financial shock and ensure your business remains resilient through the transition.