England extends small business rates grace to 36 months

If you’re thinking about opening a second site, there’s a helpful change coming. From 1 April 2026 in England, you can keep Small Business Rate Relief (SBRR) on your main property for up to 36 months after you take on a second one, rather than 12 months. The Budget announcement on 26 November 2025 flagged this and government guidance has since confirmed the three‑year grace for occupations beginning on or after 27 November 2025. (gov.uk)

A quick refresher so you can read the rule with confidence. Business rates are a tax on non‑domestic properties. Your bill is broadly your property’s rateable value multiplied by a tax rate (the ‘multiplier’). For 2026/27, ministers have set the small business multiplier at 43.2p and the standard multiplier at 48.0p, alongside new multipliers for retail, hospitality and leisure and for high‑value properties. A UK‑wide revaluation also takes effect on 1 April 2026, which is why many bills will change. (gov.uk)

Here’s the bit that changes day‑to‑day decisions. Under the ‘second property test’, taking on another property usually ends your SBRR because you no longer occupy only one hereditament. Until now you had a 12‑month period of grace to keep SBRR on your original site; for second occupations starting on or after 27 November 2025, that grace runs for 36 months. If your second occupation started before 27 November 2025, the old 12‑month limit still applies. This extension formally applies to chargeable days from 1 April 2026. (gov.uk)

Some vocabulary you’ll see on bills and in guidance. ‘Hereditament’ simply means the individual property that’s being rated. ‘Chargeable day’ is any day you’re liable for business rates. ‘Occupation begins’ is the date you actually start occupying the second property. The grace lets you keep SBRR on your first property while you test and grow the second; it doesn’t give SBRR to the second property itself.

Two worked examples to check your timing. If you took a second workshop on 15 December 2025, you’re on the pre‑Budget rule: up to 12 months of SBRR grace on your first site, ending around 14 December 2026, assuming nothing else changes. If you take a second café on 5 April 2026, you’ll have up to 36 months of SBRR grace on the first site, ending around 4 April 2029, again assuming your circumstances stay the same. That extra time is designed to let you prove the second site without losing support too soon. Government materials confirm the three‑year period and the start‑date condition. (gov.uk)

There’s also a small wording tidy‑up on bills. Demand notices will now refer to ‘Part A1 of Schedule 7 to the Local Government Finance Act 1988’ when pointing to the multipliers, replacing older references to ‘Part 1’. This follows Parliament’s 2023 non‑domestic rating reforms which inserted Part A1 for England. It’s an administrative update so the way your bill is calculated doesn’t change because of this line. (legislation.gov.uk)

Watch how this interacts with the 2026 Supporting Small Business Relief (SSBR). If you lost SBRR during 2025/26 because of the second property test but were still within your grace period on 31 March 2026, you can receive SSBR until that grace period ends. After that, SSBR stops for you even if the wider scheme runs longer. The official local authority guidance sets this out clearly so you can plan cash flow with the right end‑date in mind. (gov.uk)

Key dates to pin on your calendar: the three‑year grace applies where the second occupation begins on or after 27 November 2025; the legal change bites for chargeable days on and after 1 April 2026; the new multipliers and the 2026 revaluation also start from 1 April 2026. These dates all come from official Budget communications and guidance. (gov.uk)

Remember this is England‑specific. The statutory instrument amends England’s SBRR rules and the demand notice wording used by English billing authorities. Wales, Scotland and Northern Ireland run their own non‑domestic rates systems with separate decisions for 2026/27, so don’t assume the English grace applies there. The Welsh Government, for example, has set out a different package for 2026/27. (gov.wales)

What should you do next? Check your second‑property ‘occupation begins’ date against the 27 November 2025 cut‑off, confirm your remaining grace period with your council, and keep a note of any correspondence. If you’re budgeting for 2026/27, use the published multipliers to sense‑check estimates and ask your council how SSBR and transitional relief will appear on your bill. The sources in this piece-Business Rates Information Letter 5/2025 and the 2026 SSBR guidance-are the best starting points for a clear, shared picture. (gov.uk)