Business rates for pharmacies 2026: the RHL multiplier you may not be getting

What changed in April 2026?

Two things at once, which is why bills moved in directions owners found difficult to explain.

The revaluation. The Valuation Office Agency updated the rateable values of all non-domestic properties in England and Wales, with the new 2026 list taking effect on 1 April 2026 and running to 2029. A rateable value is the Agency's estimate of the rent a property could have been let for at the valuation date, which for this list was 1 April 2024. Values may have risen, fallen or held.

The multiplier restructure. The two multipliers which had operated until 31 March 2026 were replaced by five, reflecting both property use and rateable value band. At the same time the 40 per cent retail, hospitality and leisure relief, capped at £110,000 per business, ended, replaced by permanently lower multipliers carrying no cash cap.

The consequence is that a bill may have changed for several reasons simultaneously, since the rateable value moved, the multiplier changed, the relief was withdrawn and transitional arrangements may apply. An owner who compared one year's total against the next and drew a conclusion has almost certainly drawn the wrong one.

What are the five new multipliers?

Two observations frame what follows. The multipliers themselves fell substantially, from 55.5p and 49.9p to 48.0p and 43.2p for the standard and small business rates, which means bills are lower than they would have been at the old rates. And the gap between the RHL and non-RHL multipliers is five pence in the pound at both bands, which on a rateable value of £30,000 is a difference of £1,500 a year, every year, for the life of the list.

That £1,500 is the reason the next section matters more than its dryness suggests.

Do pharmacies qualify for the RHL multiplier?

One further wrinkle deserves attention for anyone whose position was settled previously. The legislative definition of qualifying RHL property is intended broadly to reflect the relief definition operating in 2025/26, whilst councils must administer the lower multipliers in line with the legislation itself. Decisions previously made about relief eligibility are not disturbed, but some properties which received relief may fall outside the scope of the lower multipliers. Past treatment is therefore an indication rather than a guarantee.

What about distance-selling and online pharmacies?

Here the definition does real work, and the answer is less comfortable.

The guidance excludes the storage and distribution of goods for online sales, meaning warehouses for online distributors are outside the definition even where a small part of the premises is open to visiting members of the public for in-person sales. Conversely, where a property is wholly or mainly used for the retail sale of goods to visiting members of the public, it remains within the definition even if it is also used for online or click-and-collect services.

The test therefore turns upon which activity predominates. A high street pharmacy which also fulfils online orders is likely to remain within scope. A distance-selling pharmacy operating from a unit with no meaningful walk-in trade, whose premises exist to assemble and dispatch parcels, looks considerably more like the excluded category, and an operator in that position should establish the council's view rather than assume favourable treatment.

This is an instance of a pattern this library returns to, in that the online model attracts different treatment across payments, advertising, insurance and now property taxation, and the aggregate of those differences is a cost structure which the sector's own commentary tends to underestimate.

How does the revaluation affect your bill?

A rise in rateable value does not translate proportionately into a rise in the bill, because the multipliers fell at the same time. The arithmetic is straightforward once separated.

A pharmacy with a rateable value of £20,000 attracting the small business RHL multiplier of 38.2p has a basic liability of £7,640 before reliefs. The same property at the non-RHL small business multiplier of 43.2p would be £8,640. Under the previous small business multiplier of 49.9p it would have been £9,980, though that figure was then reduced by the 40 per cent retail relief which no longer exists.

That last point is where the honest assessment sits. A small pharmacy which received 40 per cent relief in 2025/26 was paying materially less than the headline multiplier implied, and a permanently lower multiplier of 38.2p does not necessarily replace a 40 per cent discount. The government's package was presented as support worth an estimated £4.3 billion over five years, and it will genuinely benefit some pharmacies whilst leaving others paying more than the year before. The only way to know which applies is to model the specific property rather than to read the announcement.

What is transitional relief and the 1p supplement?

A redesigned transitional relief scheme, reported at £3.2 billion, caps how much a bill may rise at revaluation, so that a property whose rateable value increased does not meet the full increase immediately.

It is funded in part by a 1p supplement added to the tax rate for one year from 1 April 2026, applying to ratepayers who receive neither transitional relief nor Supporting Small Business relief. A pharmacy whose rateable value was stable therefore contributes a penny in the pound toward capping the bills of those whose values rose sharply, which is a redistribution worth understanding when reading a bill which appears inexplicably higher despite an unchanged valuation.

Supporting Small Business relief continues for those losing small business rate relief or rural rate relief as a result of the revaluation, and the Small Business Rate Relief grace period has been extended for businesses expanding into a second property, which is directly relevant to any owner opening a second pharmacy.

How do you check your bill is right?

Five checks, which together take under an hour and are the practical purpose of this article.

Identify which multiplier was applied. The bill states it. If a pharmacy under £51,000 rateable value is being charged at 43.2p rather than 38.2p, the RHL multiplier has not been applied and that is worth £5 per £1,000 of rateable value annually.

Check the rateable value itself against the Valuation Office Agency's published figure, and check the property details it holds, since an incorrect floor area or description produces an incorrect value.

Confirm reliefs are showing. Small business rate relief, transitional relief and Supporting Small Business relief each appear on the bill where they apply, and their absence is a question rather than a conclusion.

Check the 1p supplement position, since it should not apply where transitional or Supporting Small Business relief does.

Tell the council if the multiplier is wrong. Several authorities have explicitly invited ratepayers who believe they are entitled to the RHL multiplier to say so, which is a considerably shorter route than a formal challenge.

How do you challenge a rateable value?

The multiplier and the rateable value are separate matters handled by separate bodies, which is the distinction most commonly confused. The council is responsible for the bill, the reliefs and which multiplier applies. The Valuation Office Agency is responsible for the rateable value, and all queries about the valuation go to it rather than to the council.

Challenging the valuation requires registering for a business rates valuation account, after which the property details held may be checked and corrections requested. Where the property details used in the 2026 valuation are wrong, the route runs through raising a check case.

Two cautions apply. Unsolicited approaches from rating agents offering to reduce a bill for a proportion of the saving are common after every revaluation and vary considerably in quality, and an owner should establish what is actually being offered and on what terms before signing anything. And a challenge may result in the value being confirmed or increased rather than reduced, so it is a considered step rather than a free option.

What about Scotland, Wales and Northern Ireland?

Each operates its own arrangements and the differences are material.

Wales announced its 2026/27 multipliers on 3 December 2025 at 50.2p standard, 35.0p retail and 51.5p higher, and its retail multiplier definition is more restricted than the English RHL one, excluding hospitality and leisure and applying to kiosks, pharmacies, post offices and shops. A Welsh pharmacy is therefore named directly within the qualifying category, which is a more favourable position than reasoning by analogy from England would suggest.

Scotland operates three multipliers and conducts its own revaluation through the Scottish Assessors, and Northern Ireland operates separately again through Land and Property Services.

An operator with premises across borders should treat each nation's position independently rather than applying English figures, which is the same caution this library gives concerning price concessions and shortage protocols.

What is the structural point for pharmacy?

Stated as opinion, since this is an Insights piece rather than a technical guide.

Property tax is one of the few substantial pharmacy costs which is genuinely negotiable in the sense that it depends upon a classification, a valuation and a set of reliefs, each of which can be checked and some of which can be contested. Almost every other major cost line is set elsewhere, since reimbursement is negotiated nationally, staff costs follow the market, and medicine purchasing is constrained by the mechanism our concessions guide describes. Against that background, an hour spent confirming that the correct multiplier has been applied has a higher return per minute than most of what occupies an owner's week.

The wider observation is less comfortable. A pharmacy qualifies for the retail multiplier because it is, in law, a shop selling goods to visiting members of the public, whilst the clinical services which increasingly define the sector's value are the part of the business the tax system does not see. That is not an argument for anything in particular, and it is a reasonable prompt for noticing that a business's tax treatment reflects what it was rather than what it is becoming.

Key takeaways

FAQs