Tackling the UBR - from problem to solution
Business Rates: Assessing the impact of the 2026 revaluation
CHANGES IN RATEABLE VALUE POOL
England
CHANGE IN RATEABLE VALUE POOL
Wales
CHANGE IN RATEABLE VALUE POOL
2023
2026
2023
2026
UBR PREDICTIONS
UBR PREDICTIONS
2025/26
▼
2026/27
2025/26
▼
2026/27
ENGLAND
- Avison Young predicts that the total rateable value (RV) pool will increase 14.7% from £72bn in 2023, to £82.6bn in 2026.
- Consequently, the uniform business rate (UBR- small business multiplier) is expected to drop from 51p in 2025/26 to 43.8p at the start of the 2026 rating list.
- The UBR - Standard multiplier will fall from 55.8p to 47.9p.
- Of the three largest sectors performance has been mixed:
- The retail sector has stabilised following previous substantial decline in values.
- The industrial sector will experience the largest increase, with logistics seeing values increasing by 25% in England.
- The office sector has seen modest growth going into the 2026 revaluation.
WALES
- Avison Young predicts above trend increases across specialist sectors.
- We also predict that the RV pool in Wales will increase 10.8% from £2.65bn in 2023, to £2.94bn in 2026.
- Consequently, Avison Young expects the Welsh UBR to drop from 57.4p (2025/26, assuming UBR increases in line with current inflation @2.2%) to 51.1p at the start of the 2026 rating list.
- Trends in Wales closely align with those experienced in England, with substantial growth in the industrial sector (average 14.7%), limited movement in offices (1% growth) and a marginal decline across retail (-1.7%).
KEY ASKS FROM GOVERNMENT
1. A commitment that by the 2029 election the Govt will have tackled the excessive tax rate and delivered a uniform business rate no higher than 40p. Rachel Reeves needs to announce at this October’s budget to decouple the tax from annual inflationary increases and use the RV pool increase we forecast for the 2026 revaluation to drive down the base level UBR (small business multiplier).
2. To maintain an upwards transitional adjustment scheme for the 2026. Avison Young forecasts that many sectors will face significant increases in RV for the 2026 revaluation. It is vital that the government maintains an upwards transitional scheme to phase in the largest increases, sectors such as logistics, hotels, leisure and large infrastructure being the worst affected. As with the 2023 revaluation we ask for the government to fund this scheme outside of the business rates system and not reintroduce a downwards transitional adjustment scheme, the abolition of which proved so important to the retail sector.
3. Extend improvement relief. The current scheme provides a 1 year rate holiday for ratepayers on increases in liability arising from extensions and improvements. Extend the scheme to 2 years and include landlord liabilities so they can work with incoming occupiers to meet exacting carbon reduction targets.
4. The government to undertake a thorough review of empty rates. It is not necessary to penalise landlords where space has longer term vacancy. The government should introduce a system which incentivises landlords/developers to invest and encourage earlier reoccupation of the vacant stock.
5. We urge government to ensure that the VOA undertakes a detailed testing and roll out phase for Duty to Notify. This will be extremely onerous and costly to ratepayers. We consider that full implementation must be delayed to at least 2027, which will still provide the VOA with the necessary data gathering requirements to value for the 2029 revaluation.
6. Digitalisation the Business Rates system. Current IT infrastructure is antiquated and unfit for purpose with no links between the Valuation Office Agency and billing authority systems. The government must invest in the business rates system and digitalise the tax so ratepayers have a single site to review their valuations and pay their business rates.