Essential Changes for Hotels – Act Now to Prepare
ENGLAND + WALES
Business Rates are Changing – Dramatically
From April 2026, the business rates landscape is being reshaped.
40% Retail, Hospitality, Leisure (RHL) is Being Abolished
This will be replaced with new RHL multipliers.
New Five-Tier Multiplier System
Replacing the current two-tier approach, this new structure brings greater complexity and potential volatility:
- Small Business Multiplier: 49.9p
- Standard Multiplier: 55.5p
- Small Business RHL: 38.2p
- Small Business Non-Domestic: 43.2p
- Standard RHL: 43.0p
- Standard Non-Domestic: 48.0p
- High-Value Non-Domestic: 50.8p
All commercial property is being revalued in 2026. The draft Rateable Values, published
by the VOA, will take effect from 1 April 2026 – with hotels among the hardest hit by
significant increases in value:
Average Hotel RV Increase by Region:
- London: +102%
- North East: +73%
- West Midlands: +62%
- North West: +60%
- South West: +37.5%
RHL Sector Update – What it means for you
With the abolition of the 40% retail relief, the new Retail, Hospitality & Leisure (RHL) multipliers bring both opportunities and risks:
- Smaller hotels may face higher liabilities, as the new RHL multiplier is less generous than the former relief
- Larger, multi-site operators could benefit, with no £110,000 cap on savings from the new RHL rates
- Important: Properties with Rateable Values above £500,000 will fall into the ‘High Value’ multiplier tier of 50.8p, the highest band
How Graham + Sibbald can help you
- Review your draft 2026 RV figures
- Understand which multiplier tier your property will fall under
- Consider strategic review or appeal where appropriate
- Begin budgeting for phased-in rate increases from 2026
SCOTLAND
Like many ratepayers across Scotland, the Rating Team at Graham + Sibbald are still digesting the 2026 Draft Valuation Roll and continue to help clients understand the draft notices they have recently received.
It appears that the hospitality sector has seen significant increases in Rateable Values across Scotland with hotels seeing the biggest rise. We have recorded increases in Rateable Value of up to 83% in Lothian, 57% in Grampian, 48% in Fife and 47% in Highland & Western Isles but have heard of other increases far beyond these figures.
In Scotland, unlike England & Wales, the poundage rate & relief schemes for 2026/27 have not yet been released. Ratepayers will therefore have an anxious wait until the Scottish Budget on 13 January before they can calculate the full financial impact of these significant increases in Rateable Value.
The Graham + Sibbald Rating Team in Scotland can investigate the proposed 2026 Rateable Values and make recommendations on whether formal proposals should be lodged to challenge these. The time frame for lodging proposals is very tight and investigations may be time consuming & complex, therefore we recommend ratepayers contact us now in order to get the process started as soon as possible.
