Disclosure: This article is written by Shaun McManus, founder of SmartPubTools and creator of the Restaurant Console. All operational claims reflect genuine experience at Teal Farm Pub, Washington.
How Are Restaurant Business Rates Calculated in the UK?
Key Takeaway: Business rates = Rateable value × Multiplier. The standard multiplier for 2026 is 54.6p in the pound. A restaurant with a rateable value of £20,000 pays £10,920/year in business rates before any reliefs. Small business rate relief provides 100% relief under £12,000 rateable value and tapered relief up to £15,000. Most independent restaurants qualify for at least partial relief.
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By Shaun McManus | Last Updated: May 2026
The Business Rates Formula for Restaurants
Annual business rates = Rateable value × Multiplier
The rateable value is assessed by the Valuation Office Agency (VOA) and is based on the estimated annual rental value of your property on the open market at a fixed assessment date. The multiplier is set by government each year. For 2026 the standard multiplier is 54.6p (£0.546) per pound of rateable value. The small business multiplier (for businesses with a single property) is 49.9p.
| Rateable value | Standard multiplier | Annual rates before relief | Small business relief | Annual rates payable |
|---|---|---|---|---|
| £8,000 | 54.6p | £4,368 | 100% | £0 |
| £12,000 | 54.6p | £6,552 | 100% | £0 |
| £13,500 | 54.6p | £7,371 | ~50% tapered | ~£3,685 |
| £15,000 | 54.6p | £8,190 | 0% (taper ends) | £8,190 |
| £20,000 | 54.6p | £10,920 | None | £10,920 |
| £35,000 | 54.6p | £19,110 | None | £19,110 |
Small Business Rate Relief — The Detail
Small Business Rate Relief (SBRR) applies to businesses that occupy only one property (or multiple properties with a combined rateable value under £20,000) and have a single property with a rateable value under £15,000.
100% relief (zero rates): rateable value under £12,000. Tapered relief: rateable value £12,001-£14,999 — relief reduces from 100% to 0% on a sliding scale. No relief: rateable value £15,000 and above.
You must apply for SBRR — it is not applied automatically. Contact your local council’s business rates department. Many eligible businesses do not claim it simply because they do not know it exists or have not applied. If you have not applied and your rateable value is under £15,000, do it immediately — you can backdate claims.
Other Reliefs Available to UK Restaurants
| Relief | Eligibility | Discount |
|---|---|---|
| Retail, Hospitality and Leisure Relief | Retail, hospitality and leisure premises — including restaurants | Check current rates with your council — has varied year to year |
| Rural Rate Relief | Sole pub, shop, or post office in a rural settlement under 3,000 population | Up to 100% |
| Hardship Relief | Discretionary — if payment would cause severe hardship | At council discretion |
| Empty Property Relief | Empty commercial property — first 3 months at 100% relief | 100% for 3 months then standard rates apply |
| Transitional Relief | Limits rate increases following revaluation | Caps annual increase |
How to Challenge Your Rateable Value
If you believe your rateable value is incorrect — higher than the comparable market rental value for similar premises in your area — you can appeal via the VOA’s Check, Challenge, Appeal process. The process is free and can result in significant reductions for properties that were overvalued at the last revaluation.
The most recent general revaluation came into effect in April 2023. If you have not reviewed your rateable value since then, it is worth checking whether your assessment reflects current market conditions. Properties in areas where commercial rents have fallen since the assessment date may be overvalued.
To build the strongest appeal, compare your rateable value against comparable properties nearby (VOA publishes all rateable values). If yours is significantly higher per square metre than similar premises, you have grounds to challenge. Specialist rating surveyors work on a no-win-no-fee basis and are worth engaging for properties with rateable values above £15,000.
Business Rates as a Fixed Cost in Your Weekly P&L
Business rates are typically paid monthly or in 10 instalments per year. For weekly P&L purposes, divide your annual rates bill by 52 to get a weekly fixed cost figure. At a rateable value of £20,000 with no relief, that is £10,920 ÷ 52 = £210/week — approximately 2.1% of revenue for a restaurant doing £10,000/week. This sits within your occupancy cost line alongside rent.
See the restaurant weekly P&L guide for how to structure occupancy costs in your P&L. The restaurant profit margin guide shows where rates fit in the full journey from revenue to net profit. The restaurant cash flow guide covers managing large rate bills within your weekly cash position.
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Frequently Asked Questions
How are business rates calculated for restaurants UK 2026?
Rateable value × 54.6p (standard multiplier 2026). A £20,000 rateable value = £10,920/year before reliefs.
What is the small business rate relief threshold UK 2026?
100% relief under £12,000 rateable value. Tapered relief £12,001-£14,999. No relief at £15,000+. Apply to your local council — not automatic.
Can I appeal my restaurant’s rateable value?
Yes — via the VOA’s free Check, Challenge, Appeal process. Compare against similar premises. Rating surveyors work no-win-no-fee for properties with rateable values above £15,000.
Do restaurants qualify for business rates relief UK?
Most independent restaurants qualify for at least one relief. SBRR for under £15,000 rateable value. Retail, Hospitality and Leisure Relief varies by year. Rural Rate Relief for qualifying rural premises.
How much are business rates as a percentage of restaurant revenue?
Typically 1-3% of net revenue after reliefs. Sits within the 8-12% total occupancy cost benchmark alongside rent.
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