Transitional Relief and Supporting Small Business Relief
To support ratepayers facing large bill increases at the revaluation, the government introduced a redesigned Transitional Relief (TR) Scheme. Transitional Relief is designed to cap business rates bill increases which result from rateable value changes at the 2026 revaluation, these increases will then be phased in over three years. Properties with reductions in rateable values from the 2026 revaluation will see the full benefit of that reduction in their new Business Rates Bill from 1 April 2026.
Bill increase caps:
| Rateable value | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 |
|---|---|---|---|
| Up to £20,000 | 5% | 10% plus inflation | 25% plus inflation |
| £20,001 to £100,000 | 15% | 25% plus inflation | 40% plus inflation |
| Over £100,000 | 30% | 40% plus inflation | 55% plus inflation |
More information about the 2026 Transitional Relief Scheme can be found here: GOV.UK - Business rates relief: Transitional relief.
Transitional Relief Supplement
The government has also introduced a 1p supplement to the relevant tax rate for ratepayers who do not receive Transitional Relief or Supporting Small Business Rate Relief. This is to partially fund the TR scheme for 2026 and will apply for one year from 1 April 2026.
2026 Supporting Small Business Relief (SSB)
This relief caps the increase in rates for businesses losing some or all of their small business rates relief or rural rate relief as a result of the 2026 revaluation. This caps the increase in your bill at either £800 per year or the relevant Transitional Relief percentage as shown above, whichever is higher. The 2026 SSB relief scheme has been expanded to ratepayers losing their RHL relief.
The government has also announced a one-year extension of the 2023 Supporting Small Business scheme to 1 April 2027. Ratepayers who qualify for this extension will not qualify for the three-year 2026 SSB scheme. This support is applied before changes in other reliefs and local supplements, more information on SSB can be found here: GOV.UK - Business rates relief: Supporting small business relief.
Subsidy Control
The 2026 Supporting Small Business Scheme is likely to amount to a subsidy. Therefore, any relief provided by local authorities under this scheme will need to comply with the UK’s domestic and international subsidy control obligations. In such cases Supporting Small Business Relief can only be provided if it falls within the Minimal Financial Assistance threshold.
This means no recipient can receive more than £315,000 over a 3-year period. These 3 years are made up of the current financial year and the 2 previous financial years. COVID-19 business grants received from local government and any other subsidy claimed under the Minimal Financial Assistance or Small Amounts of Financial Assistance Allowance over the 3 years should be counted.
The Council will automatically withhold reliefs where it is clear the ratepayer will, or is likely to, exceed the Minimal Financial Assistance limit.
If you, or a company in your group, have received more than the Minimal Financial Assistance limit of £315,000 over 3 years, including the current financial year, you must Contact Us so that any award of relief can be removed or adjusted to meet the Minimal Financial Assistance limit.
You do not need to do anything if you do not exceed these limits.
Further details about subsidy control can be found here: GOV.UK - UK subsidy control regime.