From 1 April 2026, the Government has introduced a £3.2 billion scheme to help ratepayers manage large increases or decreases in their business rates following the 2026 revaluation.
The aim is to prevent sudden, sharp changes in bills by phasing these changes over three years.
Transitional Relief does not change your rateable value.
It simply limits how much your bill is allowed to go up or down each year, until it reaches the full amount set by the revaluation.
Annual change caps (2026-2029)
The limits on how much your bill can change depend on your rateable value band:
| Rateable Value | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Up to £20,000 | Up to 5% | Up to 10% | Up to 25% |
| £20,001 to £100,000 | Up to15% | Up to 25% | Up to 40% |
| Over £100,000 | Up to 30% | Up to 25% | Up to 25% |
These percentages apply to the bill, not the rateable value.
Transitional Relief Premium
The Transitional Relief premium is a temporary charge that applies from 1 April 2026. It is used to help fund the Government’s Transitional Relief scheme, which supports businesses facing significant increases due to the 2026 revaluation.
Who pays the premium?
You will pay the Transitional Relief premium if both of the following apply:
- Your property does not qualify for Transitional Relief (because your bill is not increasing or decreasing by more than the allowed limits), and
- You are not receiving Supporting Small Business Relief.
Only these businesses pay the premium.
How the premium is calculated?
The premium applies for one year only from 1 April 2026 to 31 March 2027.
The 1p premium is calculated by multiplying 0.01 by your property’s rateable value (RV).
Why is the premium applied?
The premium helps fund the cost of providing Transitional Relief to businesses whose bills are capped. It ensures that the overall transitional system remains financially balanced without central government requiring additional funding.
How it appears on your business rates bill
The Transitional Premium will be shown on the bill before any other reliefs are applied, such as Small Business Rate Relief, Charity Relief or RHL Relief.
Further information regarding the 2026 Business Rates reliefs can be found on the GOV.UK website: Business rates relief: Types of business rates relief – GOV.UK
