With just six months until the publication of the Draft Rating List for Revaluation 2026, the House of Lords has dealt another blow to the business community by blocking the government’s proposed business rates reforms.
In a significant setback for the government’s agenda, the Lords rejected a key element of the reforms—the proposed amendments to the business rates multiplier for large properties.
These changes, originally outlined in Labour’s manifesto, aimed to maintain revenue levels while making the system fairer, particularly by creating a more balanced playing field between high-street businesses and large online retailers.
Adam Barnfield, Head of Business Rates, explores what the Lords’ decision will mean for businesses across the UK, who face even more uncertainty as they budget for business rates costs for 2026 and 2027.
During the Report Stage of the Non-Domestic Rating (Multipliers and Private Schools) Bill on 18 March, the Lords passed amendments that effectively halt plans to impose a supplementary tax on large properties in England from April 2026.
The government had intended to use this tax to fund discounts for businesses in the retail, hospitality, and leisure sectors.
However, opposition peers raised concerns about the broad scope of the supplement, which could have reached up to 20% for properties with a rateable value of £500,000 or more.
This threshold would have affected hospitals, manufacturing sites, offices, and even some high-street stores.
While the tax was primarily intended to target large distribution hubs operated by online giants like Amazon, the Lords voted to exempt healthcare facilities, manufacturing sites, and key retail anchor stores from the charge.
One of the most significant criticisms of the proposal is the lack of a clear rationale for the £500,000 rateable value threshold.
As far as we are aware, no impact assessment was conducted to evaluate the potential consequences of the reform.
In fact, in response to parliamentary questions, the government admitted that it lacks accurate data on how many large properties are occupied by online retailers—further undermining its justification for the measure.
