What transitional relief is, who is eligible, how it's calculated and the transitional relief supplement
From 1 April 2026, the government brought in a new transitional relief scheme to help businesses manage changes to their business rates following the 2026 revaluation.
A transitional relief supplement will also apply to some ratepayers.
What transitional relief is
When the Valuation Office Agency (VOA) updates rateable values as part of a revaluation, some businesses may have to pay more in business rates.
To help make these increases more manageable, the government applies transitional relief. This limits how much a business rates bill can go up each year, so any increase is introduced gradually rather than all at once.
Transitional Relief at GOV.UK has more information, including how much your bill might change by.
Eligibility for the scheme
You'll be eligible for the Transitional Relief scheme if:
- your business rates bill has increased because of the revaluation
- the bill for your property is based on the revaluation
We'll check if you're eligible and work out how much you'll get, using government guidelines.
If you qualify, we'll apply the relief directly to your rates bill.
Increases in the rateable value
Any increases in rateable value that take effect after 1 April 2026 will not qualify for further transitional relief.
Although the scheme runs for three years, your entitlement will end once the phased increases have brought your bill up to the full amount set by the revaluation. We'll work this out automatically.
Yearly caps
Under the scheme, yearly caps limit how much your bill can increase each year. This means the increases happen gradually over three years, instead of all at once.
Rateable Value (RV) up to 20,000:
- 2026 to 2027, 5%
- 2027 to 2028, 10% plus inflation
- 2028 to 2029, 15% plus inflation
Rateable Value (RV) 20,001 to 100,000:
- 2026 to 2027, 15%
- 2027 to 2028, 25% plus inflation
- 2028 to 2029, 40% plus inflation
Rateable Value (RV) over 100,000:
- 2026 to 2027, 30%
- 2027 to 2028, 25% plus inflation
- 2028 to 2029, 25% plus inflation
How transitional relief is calculated
Example 1: Rateable Value (RV) 15,000
- 2025 to 2026 bill: £10,000
- 2026 to 2027 revised bill: £13,000
This is a 30% increase.
The maximum allowed for this RV band is 5%.
Calculation
Calculate the maximum allowed bill:
£10,000 × 1.05 = £10,500
Compare allowed bill with new bill:
New bill = £13,000
Allowed maximum = £10,500
Final bill for 2026 to 2027 year after transitional relief: £10,500.
Transitional relief prevents the bill from jumping straight to £13,000.
Example 2: Rateable Value (RV) £50,000
- 2025 to 2026 bill: £40,000
- 2026 to 2027 revised bill: £50,000
This is a 25% increase.
For this band (£20,001 to £100,000), the maximum increase for 2026 to 2027 is 15%.
Calculation
Maximum allowed = £40,000 × 1.15 = £46,000
New bill (£50,000) is higher than allowed (£46,000).
Final bill after transitional relief: £46,000.
Transitional relief supplement
For the 2026 to 2027 financial year, starting 1 April 2026, the government is introducing a 1p transitional relief supplement to help fund the transitional relief scheme.
The supplement only applies to ratepayers who do not receive transitional relief or Supporting Small Business Relief. If you receive either of those reliefs, you will not pay the supplement.
How the transitional relief supplement is calculated
If you do not qualify for transitional relief or Supporting Small Business Relief:
- your multiplier increases by 1p, for example, from 43.2p to 44.2p
- the supplement applies for one year only, 2026 to 2027
If your RV is 30,000, then:
- the 1p supplement is £0.01 × 30,000
- the additional amount payable is £300 for the year
This does not affect new properties added to the rating list from 1st April 2026.
It is applicable to properties (also known as hereditaments) that have been created from splits or mergers of an existing hereditament already in the rating list.