Business Rates: Tax Allowances
The question
To ask the Secretary of State for Housing, Communities and Local Government, whether the Base Liability for business rate transitional relief calculations from which the transitional cap applies in 2026/27 is based on the 2025-26 bill (a) after or (b) before the 40% Retail, Hospitality and Leisure relief was applied.
Answered by Alison McGovern
Support for those facing increases in business rates bills at the 2026 revaluation is provided by the Transitional Relief Scheme and the Supporting Small Business Relief Scheme.
Transitional Relief is calculated from a base liability of the 2025/26 bill before all other reliefs. However, the Supporting Small Business Relief Scheme calculates support from a base liability of the 2025/26 bill including eligible reliefs. For the 2026 scheme, those ratepayers losing some or all of their Small Business Rate Relief, Rural Rate Relief, 2025/26 Retail, Hospitality and Leisure Relief, or 2023 Supporting Small Business Rate Relief will be eligible for the 2026 Supporting Small Business Scheme.
The statutory instrument to take forward the 2026 Transitional Relief scheme was laid on 15 December 2025. The Department issued the guidance for local authorities to implement the 2026 Supporting Small Business Relief Scheme on 15 December. The Treasury has also published a factsheet, Budget 2025: Retail, Hospitality and Leisure Factsheet, which includes case studies and example rates bills.
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