Small business rate relief Wales: bands and rules

How small business rate relief works in Wales

In Wales, small business rate relief (SBRR) gives eligible business premises with a rateable value of up to £6,000 100% relief, and those with a rateable value between £6,001 and £12,000 relief on a tapered basis from 100% to zero. Local authorities run the scheme and apply the relief automatically to the bills of eligible ratepayers.

A business rates review may look at the rateable value, multiplier and reliefs shown on a Welsh bill. Questions about the rateable value itself are covered in the guide to challenging a business rates valuation.

What qualifies for small business rate relief?

SBRR is entirely funded by the Welsh Government and provides mandatory rates relief to properties according to their rateable value and broad category of use. Its guidance applies to Wales only.

The number of properties eligible for SBRR is limited to two properties per business in each local authority, although properties which meet the childcare or post office conditions are not affected by this restriction.

Some properties are excluded, primarily types of property not considered consistent with the definition of a small business, such as those occupied by a council, a police and crime commissioner or the Crown. Properties occupied by charities are not eligible for SBRR, although charities may be eligible for charitable relief. Unoccupied properties may be eligible for empty property relief.

The guide to properties exempt from business rates sets out which properties are exempt.

To qualify for SBRR, an eligible property must also be occupied, so an empty property cannot receive it, although it may be eligible for empty property relief. ^[1]

Is small business rate relief ending in 2026?

The current Welsh guidance still sets out SBRR, with an illustration of the support qualifying small businesses could expect in 2026-27. SBRR may be amended at any time, in which case it is possible that businesses may cease to be eligible for relief.

The 2026 change was a revaluation. The Valuation Office updates the rateable values of non-domestic properties in England and Wales every 3 years, and current rateable values came into effect on 1 April 2026. ^[2] A new rateable value may move a property into, within or out of the SBRR bands.

From 1 April 2026, following the revaluation, the Welsh Government is providing transitional relief to all ratepayers whose liability is increasing by more than £300 as a consequence of revaluation. A ratepayer will pay 33% of their additional liability in the first year (2026-27) and 66% in the second year (2027-28), before reaching their full liability in the third year (2028-29).

What size is exempt from business rates in Wales?

SBRR in Wales is based on rateable value bands rather than a floor-area threshold, with 100% relief for eligible premises with a rateable value of up to £6,000, whereas exemption depends on the type of property. Two kinds of property have their own treatment. Post offices with a rateable value up to £9,000 receive 100% relief, and post offices with a rateable value between £9,001 and £12,000 receive 50% relief. The Welsh Government is providing 100% relief to all registered childcare providers in Wales.

Exemption works by type of property: a list of the exempt types of property is in Schedule 5 to the Local Government Finance Act 1988.

A rateable value is not the amount a business pays. ^[2] Business rates are calculated by taking the rateable value and multiplying it by the relevant multiplier, and any reliefs the ratepayer is eligible for are then applied to determine the bill. For 2026-27, the standard multiplier in Wales is 0.502, applicable to most other properties, and the retail multiplier is 0.350, applicable to small to medium sized retail shops with a rateable value below £51,000.

Other business rates reliefs available in Wales

Business rates relief differs between the nations, and the rules are different if a property is in Scotland, Wales or Northern Ireland rather than England. ^[3] In England, no business rates are paid on a property with a rateable value of £12,000 or less, if that is the only property the business uses.

In Wales, other reliefs sit alongside SBRR. A property occupied by a registered charity or community amateur sports club, and used for charitable purposes, automatically qualifies for 80% mandatory rates relief. Empty business properties are exempt from paying business rates for three months after the property becomes unoccupied, and additional exemptions apply to certain types of property or to properties under a set rateable value, after which the full bill is payable once the exemption period ends.

In 2026-27, Food and Drink Hospitality Rates Relief makes pubs, restaurants, cafes, bars and live music venues eligible for 15% off their liability for the financial year, capped at £110,000 per business across Wales.

Improvement Relief delays the effect of a rateable value increase resulting from improvements on a ratepayer's liability for a period of 12 months. Local authorities can also grant hardship relief or other discretionary relief if they believe that it is in the interests of the local community to do so.

Checking SBRR on a Welsh bill

Billing queries about the relief go to the relevant local authority. If a ratepayer has reason to believe the relief allocated to their property or their bill is incorrect, the administering local authority will be able to deal with the enquiry.

A business occupying several small properties in one local authority area is responsible for informing that authority if it believes the two-property restriction applies to its properties.

From 1 April 2026, a ratepayer must notify their local authority within 60 days of the date on which a property became occupied after previously being empty, or ceased to be occupied and became empty, and failure to comply with this duty may result in a fine of £500.