Business rates transitional relief is a reduction in a business rates bill in England that applies when a business's rates go up by more than a set amount. [1] It matters most after the 2026 revaluation, when rateable values based on rental value on 1 April 2024 came into effect on 1 April 2026. [2] In the order used to apply reliefs, transitional relief comes after improvement relief and before other mandatory reliefs.
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How business rates transitional relief works
Business rates transitional relief is a reduction in a business rates bill in England that applies when a business's rates go up by more than a set amount. [1] Transitional relief limits how much a bill can change each year as a result of business rates revaluation, and it stops when the bill reaches the full amount set by a revaluation.
Whether transitional relief appears correctly on a bill is one point a valuation and billing review may identify. The rules for business rates relief are different for property in Scotland, Wales or Northern Ireland, so this guide covers England.
How the 2026 revaluation connects to transitional relief
The Valuation Office updates the rateable values of non-domestic properties in England and Wales every 3 years, and this is known as a revaluation. For the 2026 revaluation, rateable values are based on what it would cost to rent a property for a year on 1 April 2024, and current values came into effect on 1 April 2026. [2]
A rateable value is not the amount a business pays, because local councils use rateable values to calculate business rates bills. From 1 April 2026, rate multipliers are used to calculate the bill. A new rateable value can therefore change the bill, and where a business's rates go up by more than a set amount, transitional relief applies.
The guide to appealing a rateable value covers checking and challenging a valuation, and the guide to exempt properties and 2026 changes covers which properties pay nothing at all.
Will business rates relief be extended in 2026?
In England, support carries on into 2026 for businesses that lose relief at the revaluation: a business losing some or all of certain existing business rates relief from 1 April 2026 may be eligible for business rates relief.
Supporting small business relief may be available to a business whose property's bill has increased due to revaluation and which has lost some or all of its small business rate relief, rural rate relief, retail, hospitality and leisure relief or 2023 supporting small business relief.
Eligible pubs and live music venues in England receive a 15% reduction on their business rates bills for the 2026/27 financial year. [3] Pubs and live music venues relief is only available up to the end of the 2026 to 2027 billing year, and a pub or venue can still get it if it already gets transitional relief or supporting small business relief. An eligible pub or venue's bill will not increase by more than the rate of inflation from 1 April 2027 until 31 March 2029.
Other reliefs that can sit alongside transitional relief
The local council decides which type of relief a business is eligible for, and local councils can also choose to offer relief to businesses that benefit the local community or economy.
How much small business rate relief a business gets depends on the property's rateable value. A business cannot get small business rate relief and charitable rate relief at the same time.
Charitable rate relief gives up to 80% off the bill, and the council may be able to top up the discount so that no rates are payable.
Which property sizes pay no business rates in England?
The figure that matters is rateable value. In England, no business rates are payable on a property with a rateable value of £12,000 or less, if that is the only property the business uses.
Some properties are exempt from business rates. If the VO decides a property is exempt, no business rates are due on it again unless the business or premises change. Empty property relief means no business rates on an empty property for 3 months, and industrial premises such as warehouses are exempt for a further 3 months.
Where transitional relief sits in the order of reliefs
In the sequence set out in England for applying reliefs alongside the 2026/27 pubs and live music venues relief, improvement relief comes first, then transitional relief, then other mandatory reliefs, then section 47 discretionary relief starting with 2026 supporting small business relief. [3]
Pubs and live music venues relief is calculated on the daily charge after any mandatory relief and certain other discretionary reliefs have been applied. Eligibility for that relief and the relief itself are assessed and calculated on a daily basis.
A business that is unsure how several reductions on its bill were applied can contact its local council with questions about transitional relief. The local council can explain which types of relief a business can get and how to apply.
Sources
Rates, thresholds and dates in this guide come from these sources. Check the source for the current figure.