The Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2026
These Regulations, made by the Treasury and effective from 1st April 2026, prescribe the specific non-domestic rating multipliers used to calculate business rates in England for occupied, unoccupied, and centrally rated hereditaments, establishing thresholds based on rateable value (£51,000 and £500,000) to determine whether a small business RHL, standard RHL, high-value, or standard multiplier applies, particularly for retail, hospitality, and leisure properties, while also amending the 2024 Regulations to limit their future applicability.
Arguments For
Establishes clear, tiered multiplier thresholds based on the rateable value of non-domestic hereditaments in England for the upcoming financial year, providing certainty for local authorities and ratepayers.
Tailors rates using specific multipliers (small business RHL, standard RHL, high-value) for retail, hospitality, and leisure (RHL) properties, potentially supporting sectors identified as qualifying.
Ensures continuity and alignment with existing legislative frameworks (Local Government Finance Act 1988 and subsequent amendments like the Non-Domestic Rating Act 2023) by prescribing values derived from those acts.
Provides necessary legal underpinning for local billing authorities to calculate and levy non-domestic rates accurately based on prescribed statutory values.
Arguments Against
The tiered system introduces complexity in rate assessment, requiring detailed differentiation between RHL and non-RHL hereditaments and the application of different prescribed multipliers (M, B, D).
Decisions on setting the monetary thresholds (£51,000, £500,000) are solely executive (made by H.M. Treasury), which some stakeholders might argue lacks broader democratic scrutiny over local taxation policy.
Amending the 2024 Regulations by excluding their application from 2026 onwards requires ratepayer and administrator vigilance to ensure the correct set of rules is applied for the appropriate financial year.
The regulations rely heavily on external definitions (e.g., RHL hereditament definition from S.I. 2025/1093), creating dependencies that complicate full comprehension outside the context of multiple statutory instruments.
STATUTORY INSTRUMENTS
2026 No. 152
RATING AND VALUATION, ENGLAND
The Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2026
Made - - - -
23rd February 2026
Coming into force -
1st April 2026
This identifies the document as a Statutory Instrument from 2026, numbered 152, relating to Rating and Valuation within England.
The regulations were officially made on February 23rd, 2026, and they legally came into force on April 1st, 2026.
The Treasury make these Regulations in exercise of the powers conferred by sub-paragraphs (9) (a), (9B) and (10)(a) of paragraph 10 of Schedule 4ZA, sub-paragraphs (6)(a), (6A) and (7)(a) of paragraph 3 of Schedule 4ZB, and sub-paragraphs (8)(a)(i), (8A) and (9)(a) of paragraph 6 of Schedule 5A to the Local Government Finance Act 1988( 1 ).
The Treasury is enacting these rules using specific powers granted within Schedules 4ZA, 4ZB, and 5A of the Local Government Finance Act 1988.
These schedules govern the rating of occupied hereditaments (4ZA), unoccupied hereditaments (4ZB), and central rating (5A).
A draft of these Regulations has been laid before Parliament in accordance with subsections (7B), (7D) and (7F) of section 143 of the Local Government Finance Act 1988( 2 ) and approved by resolution of each House of Parliament.
Before becoming law, a draft of these regulations was presented to both the House of Commons and the House of Lords.
Parliament formally approved the draft through a resolution, fulfilling a mandatory procedural requirement under Section 143 of the 1988 Act.
Citation, extent, application and commencement
- -(1) These Regulations may be cited as the Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2026.
- (2) These Regulations extend to England and Wales and apply in relation to England only.
- (3) These Regulations apply in relation to financial years beginning on or after 1st April 2026.
- (4) These Regulations come into force on 1st April 2026.
Regulation 1 details the official title of the instrument.
Although the regulations extend geographically to both England and Wales, their application regarding non-domestic rating only concerns England.
They specifically govern financial years commencing on or after April 1st, 2026, which is also their date of commencement.
Interpretation
-
In these Regulations'the Act' means the Local Government Finance Act 1988;
Regulation 2 begins the interpretation section, defining the shorthand reference 'the Act' to consistently mean the Local Government Finance Act 1988 throughout the rest of the document.
'high-value multiplier', in relation to a chargeable day and a billing authority, means the multiplier with that description calculated for that day and that authority in accordance with regulations under paragraph A6A(1)(a) or 9B(1)(a)(i) (other higher non-domestic multipliers) of Schedule 7 to the Act( 3 );
This term defines the 'high-value multiplier' used for specific rating calculations on a given day, as determined by separate regulations made under Schedule 7 of the Act.
'RHL hereditament', in relation to a chargeable day, means a hereditament which is a qualifying retail, hospitality or leisure hereditament for that day( 4 );
An 'RHL hereditament' is defined simply as any property that legally qualifies as a retail, hospitality, or leisure property on the day the charge is being calculated.
'small business RHL multiplier', in relation to a chargeable day and a billing authority, means the multiplier with that description calculated for that day and that authority in accordance with regulations under paragraph A6A(1)(b) or 9B(1)(a)(ii) (other lower non-domestic multipliers) of Schedule 7 to the Act;
This specifies the 'small business RHL multiplier,' which is provided via regulations under Schedule 7 and applies to specific categories of lower-value RHL properties.
'standard RHL multiplier', in relation to a chargeable day and a billing authority, means the multiplier with that description calculated for that day and that authority in accordance with regulations under paragraph A6A(1)(b) or 9B(1)(a)(ii) of Schedule 7 to the Act.
The 'standard RHL multiplier' refers to the rate used for RHL properties that do not meet the criteria for the small business or high-value categories, as calculated under Schedule 7 regulations.
Local rating: occupied hereditaments
- -(1) Paragraphs (2) to (5) apply for the purposes of paragraphs 1 (chargeable amount before any reliefs), 2(1) (charitable rate relief) and 3 (improvement rate relief) of Schedule 4ZA to the Act.
Regulation 3 dictates the specific multipliers applicable for local rating concerning occupied commercial properties under Schedule 4ZA of the Act.
These rules affect the initial charge calculation, charitable rate relief, and improvement rate relief.
(2) For any chargeable day and any billing authority, M( 5 ) is prescribed as the small business RHL multiplier in relation to an RHL hereditament if for that day A is less than £51,000.
If a qualifying RHL hereditament has an applicable rateable value (A) below £51,000 on the charging day, the multiplier designated as M is set as the 'small business RHL multiplier' for that property.
(3) For any chargeable day and any billing authority, M is prescribed as the standard RHL multiplier in relation to an RHL hereditament if for that day A is-
(a) £51,000 or more, but
(b) less than £500,000.
If a qualifying RHL hereditament has a rateable value (A) between £51,000 (inclusive) and £500,000 (exclusive), the multiplier M is prescribed as the 'standard RHL multiplier'.
(4) For any chargeable day and any billing authority, M is prescribed as the high-value multiplier in relation to a hereditament if for that day A is £500,000 or more.
If any hereditament, including an RHL hereditament, has a rateable value (A) of £500,000 or higher, the multiplier M is set as the 'high-value multiplier'.
(5) For any chargeable day for which none of paragraphs (2) to (4) apply in relation to a hereditament-
(a) M is prescribed as D if for that day A is less than £51,000, and
(b) in any other case M is prescribed as B.
If the property does not fit the specified RHL categories in the preceding sub-sections, a default assignment occurs: if the rateable value (A) is less than £51,000, M becomes D; otherwise, M becomes B.
(6) For the purpose of paragraph 4(1)( 6 ) (small business rate relief) of Schedule 4ZA to the Act, for any chargeable day and any billing authority-
(a) M is prescribed as the small business RHL multiplier in relation to an RHL hereditament, and
(b) in any other case M is prescribed as D.
When calculating specific small business rate relief for RHL hereditaments under paragraph 4(1) of Schedule 4ZA, M is set as the small business RHL multiplier for those specific RHL properties, but set as D for all other properties.
Local rating: unoccupied hereditaments
- -(1) Paragraphs (2) and (3) apply for the purposes of paragraph 1(1) and (2)(a) (chargeable amount before any reliefs) of Schedule 4ZB to the Act.
Regulation 4 establishes the multiplier rules for unoccupied hereditaments under Schedule 4ZB. These rules govern the calculation of the chargeable amount before any reliefs are applied to these vacant properties.
(2) For any chargeable day and any billing authority, M( 7 ) is prescribed as the high-value multiplier in relation to a hereditament if for that day A is £500,000 or more.
For unoccupied hereditaments, if the applicable rateable value (A) is £500,000 or higher, the multiplier M is prescribed as the 'high-value multiplier' for that charging day.
(3) For any chargeable day for which paragraph (2) does not apply in relation to a hereditament-
(a) M is prescribed as D if for that day A is less than £51,000, and
(b) in any other case M is prescribed as B.
If the rateable value (A) of an unoccupied hereditament is below £500,000, the multiplier M defaults: it is prescribed as D if A is under £51,000, and otherwise, it is prescribed as B.
Central rating
- -(1) Paragraphs (2) and (3) apply for the purposes of paragraphs 1 (chargeable amount before any reliefs), 2(4) (charitable rate relief), 3 (improvement rate relief) and 4(4) (unoccupied hereditaments rate relief) of Schedule 5A to the Act.
Regulation 5 sets the multipliers for central rating under Schedule 5A. These rules cover the base charge, charitable relief, improvement relief, and relief for unoccupied hereditaments within the central rating system.
(2) For any chargeable day, M( 8 ) is prescribed as the high-value multiplier in relation to a hereditament if for that day A is £500,000 or more.
Under central rating, if the applicable rateable value (A) reaches £500,000 or exceeds it on the charging day, M is prescribed as the 'high-value multiplier'.
(3) For any chargeable day for which paragraph (2) does not apply in relation to a hereditament-
(a) M is prescribed as D if for that day A is less than £51,000, and
(b) in any other case M is prescribed as B.
If the central rating property's value (A) is below £500,000, M is set as D if A is less than £51,000, or it is set as B for all remaining cases.
Amendment of the Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2024
- After regulation 1(2) (application) of the Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2024( 9 ) insert-
'(2A) These Regulations do not apply to financial years beginning on or after 1st April 2026.'.
Regulation 6 amends the earlier 2024 Regulations concerning non-domestic rating multipliers.
It specifically inserts a new sub-regulation stating that the 2024 regulations cease to have effect for any financial year that starts on or after April 1st, 2026.
23rd February 2026
Gen Kitchen Christian Wakeford Two of the Lords Commissioners of His Majesty's Treasury
This section provides the signatory details, confirming that Gen Kitchen and Christian Wakeford, acting as two Lords Commissioners, executed these regulations on behalf of His Majesty's Treasury on February 23rd, 2026.
EXPLANATORY NOTE
(This note is not part of the Regulations)
In relation to England, a ratepayer's liability to a non-domestic rate as regards a hereditament is determined in accordance with the Local Government Finance Act 1988 (c. 41). Liability as regards occupied local rating properties, unoccupied local rating properties and central rating is determined in accordance with formulae in Schedules 4ZA, 4ZB and 5A to that Act.
The explanatory note clarifies that non-domestic rate liability in England is determined by the 1988 Act, specifically through formulae found in Schedules 4ZA (occupied), 4ZB (unoccupied), and 5A (central rating).
For the purposes of particular provisions in those Schedules, the Treasury have the power to prescribe in regulations the multiplier that is used in the formulae. In relation to local rating occupied hereditaments, regulation 3 provides that the following multipliers will apply:
- for RHL hereditaments (meaning retail, hospitality or leisure hereditaments as defined in the Non-Domestic Rating (Definition of Qualifying Retail, Hospitality or Leisure Hereditament) Regulations 2025 (S.I. 2025/1093)) with an applicable rateable value of less than £51,000 (including those eligible for small business rate relief), the small business RHL multiplier;
- for RHL hereditaments with an applicable rateable value that is £51,000 or more but less than £500,000, the standard RHL multiplier;
- for any hereditament that has an applicable rateable value of £500,000 or more, the high-value multiplier;
- for any other hereditaments, the small business non-domestic rating multiplier will apply if the applicable rateable value is less than £51,000, but otherwise the non-domestic rating multiplier will apply.
The Treasury uses regulations to set the multipliers within the formulae.
Regulation 3 assigns multipliers for occupied hereditaments based on rateable value: the small business RHL multiplier for RHL properties under £51,000; the standard RHL multiplier for RHL properties between £51,000 and £500,000; the high-value multiplier for all properties £500,000 and above; and default multipliers (small business or standard) for all others.
Regulation 4 (in relation to local rating unoccupied hereditaments) and regulation 5 (in relation to central rating hereditaments) provide that:
- the high-value multiplier will apply to a hereditament if the applicable rateable value is £500,000 or more;
- for any other hereditaments, the small business non-domestic rating multiplier will apply if the applicable rateable value is less than £51,000, but otherwise the non-domestic rating multiplier will apply.
Regulations 4 and 5 establish that for both unoccupied and centrally rated hereditaments, the high-value multiplier is used if the rateable value is £500,000 or greater.
If below that threshold, the small business multiplier applies for values under £51,000, and the standard non-domestic multiplier applies otherwise.
Regulation 6 amends the Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2024 (S.I. 2024/111) so that those Regulations will not apply to financial years beginning on or after 1st April 2026.
The final regulation explicitly states that it modifies the previous 2024 regulations, ensuring they are superseded and do not apply to any financial years commencing on or after April 1st, 2026, effectively making the 2026 rules the governing legislation from that date.
An impact assessment has not been produced for this instrument because it amends an existing local tax regime. Publication of a full impact assessment is not necessary for such legislation.
The government notes that a full impact assessment was not created for these rules.
This is because the instrument merely amends an existing local taxation structure, which legally exempts it from the requirement for a detailed assessment of its economic or social impact.