Overview of Business Rates

If the sole or main property is shown on the rating list with a rateable value of £12,000 or less, the ratepayer will normally receive a 100% reduction in their rates bill. For a sole or main property with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.

Generally, this percentage reduction is only available to ratepayers who occupy either

1. one property, or
2. one main property and other additional properties, providing those additional properties each have a rateable value of less than £2,900.

The aggregate rateable value of all the properties mentioned in (b), must be less than £20,000, on each day for which relief is being sought. If the rateable value, or aggregate rateable value, increases above those levels, relief will cease from the day of the increase. For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, they will be allowed to keep that relief for a period of 12 months. (At the Autumn Budget 2025, it was announced that this grace period would be extended to three years. We are currently awaiting the legislation to support this.)

Where a ratepayer meets the eligibility criteria and has not received the relief they should contact the council. Provided the ratepayer continues to satisfy the conditions for relief which apply at the relevant time as regards the property and the ratepayer, they will automatically continue to receive relief in each new valuation period.

Certain changes in circumstances will need to be notified to the council by a ratepayer who is in receipt of relief. The changes which should be notified are:

1. the property falling vacant,
2. the ratepayer taking up occupation of an additional property, or
3. an increase in the rateable value of a property occupied by the ratepayer in an area other than the Test Valley Borough Council area.

You may be eligible for supporting small business relief if both of the following apply:

• your business rates bill increases following the revaluation on 1 April 2026
• you’ve lost some or all of your small business rate relief, rural rate relief, retail hospitality and leisure relief or 2023 supporting small business relief

If you’re eligible, your bill in 2026 to 2027 will go up by no more than £800 or the percentage cap listed below (whichever is greater):

• 5% for rateable values up to £20,000
• 15% for rateable values of £20,001 to £100,000
• 30% for rateable values over £100,000

This is compared to your bill in 2025 to 2026 and includes the following:

• any small business rate relief
• rural rate relief
• retail hospital and leisure relief
• 2023 supporting small business relief

Relief will be included on your bill automatically if you are eligible.

In 2026-27, business rates relief of 15% will be awarded to pubs and live music venues that meet the conditions below. This relief will apply on top of any transitional relief or supporting small business relief that you may be eligible for.

Pubs:

• are open to the general public,
• allow free entry (other than when occasional entertainment is provided),
• allow drinking without requiring food to be consumed, and
• permit drinks to be purchased at a bar.
• The meaning of pub does not include restaurants, cafes, nightclubs, snack bars, hotels, guesthouses, boarding houses, sporting venues, festival sites, theatres, concert halls, cinemas, museums, exhibition halls or casinos.

Live music venues:

• are wholly or mainly used for the performance of live music for the purpose of entertaining an audience
• can be used for other activities but only if those other activities are:
  • ancillary or incidental to the performance of live music (e.g. the sale of food or drink to audience members)  
  • do not affect the primary use of the premises for the performance of live music (e.g. because the activities are infrequent such as use of the venue as a polling station or fortnightly community event)
• Properties are not a live music venue for the purpose of this relief if the property is wholly or mainly used as a nightclub or a theatre, for the purposes of the Town and Country Planning (Use Classes) Order 1987 (as amended).

Full details, including examples of eligible properties, can be found here: www.testvalley.gov.uk/business/land/business-rates/reliefs/discretionary-rate-relief/

Charities and registered Community Amateur Sports Clubs are entitled to 80% relief where the property is occupied by the charity or the club, and is wholly or mainly used for the charitable purposes of the charity (or of that and other charities), or for the purposes of the club (or of that and other clubs). The council has discretion to give further relief on the remaining bill.

Certain types of property in a rural settlement, with a population below 3,000, may be entitled to a discount. The property must be the only general store, the only post office or a food shop and have a rateable value of less than £8,500; or the only public house or the only petrol station and have a rateable value of less than £12,500. The property must be occupied. An eligible ratepayer is entitled to relief at 100% of the full charge. The council also has discretion to award up to 100% relief to businesses in rural settlements that do not fit the above criteria but whose rateable value is less than £16,500.