Business rate reform: Call for evidence

The UK government has launched a call for evidence on business rates and investment. Now is the time to have your say on business rate reform.

The call for evidence focuses on how reform of the business rates system can be used to incentivise and secure more investment by UK businesses. It will close on 18 February 2026.  

The areas that the consultation highlights for input are outlined below.  

The tax structure (moving from ‘slab’ to ‘slice’)

This reform would involve implementing a more progressive tax system for business rates.  

Currently, if a property increases in rateable value (RV) and moves up a band, then the full amount is subject to the higher band. This is commonly referred to as the slab approach to valuation.  

Under a slice approach, each band would have its own multiplier and therefore only the amount within each band would be subject to that rate. This would be in line with how income tax and Stamp Duty Land Tax currently operate.  

The government is asking for examples of where the rate increases under the slab approach have negatively impacted investment decisions.

Small Business Rates Relief

Small Business Rates Relief (SBRR) provides 100% relief for a property with an RV of £12,000 or less, with tapered relief for properties with an RV between £12,000 and £15,000.  

Generally, SBRR is only available to businesses with a single property. It is therefore felt that the current approach disincentivises expansion to more than one property.  

As with the slab approach to business rates, the government is also interested in hearing how potentially losing SBBR impacts investment decisions.  

Improvement relief

Improvement relief was introduced in 2024 and offers 12 months’ relief from higher business rates after property improvements are made.  

The government is looking for evidence on whether this is sufficient to incentivise investment and how it is impacting investment decisions.

Empty Property Relief 

Empty Property Relief (EPR) provides owners of empty non-domestic properties with 100% relief for the first three months (or six months for industrial properties) after a property becomes vacant. After this period, full business rates become payable if the property remains empty.  

If the property is then occupied for a period of 13 weeks or more (known as the reset period), EPR will be available again if it later becomes vacant.  

The government is asking whether EPR works effectively, particularly given the time needed to secure new tenants, and how EPR influences the decision to buy or sell empty properties.

Valuations on the receipts and expenditure

For businesses whose properties are valued for business rate purposes under the receipts and expenditure (R&E) basis, this can create uncertainty around valuation. This has an impact on long-term investment decisions.   

The government would like to hear from these ratepayers about ways the business rates system could better support investments. Specifically, it is looking for evidence on: 

• The extent to which R&E practice and procedure has impacted investment decisions and business plans.
• Experiences of the pre-list discussion process and how it could be improved to improve transparency and predictability.
• What the government could do to support predictability and stability, enabling investment for properties valued on the R&E methodology.

Let us know what you think

The government is interested in hearing from a wide range of sectors to support policy decisions. If you want to have your say, please respond directly to the call for evidence with examples and case studies, or contact ICAS with your thoughts.

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