Penrith has, over the last year, faced a wave of high street business closures, with more set to follow in the coming months. Now Penrith BiD is urging local businesses to review changes to their business rates and speak with their accountants ahead of valuation changes due to take effect from April 2026.
In November’s Budget, Chancellor Rachel Reeves announced a shake-up to how business rates are calculated, with a new band for retail, hospitality and leisure, bringing an end to the relief scheme first introduced in 2020 during the pandemic.
The system of business rate relief is changing from a temporary relief scheme that, for the hospitality and leisure sector, provided up to 40% business rates relief, to a permanent system with different structures and eligibility. Depending on individual circumstances, this may result in higher business rates for local businesses.
The changes, and their potentially devastating impact on businesses, have already seen pub landlords in parts of the country banning Labour MPs from entering their pubs.
In a statement, Penrith Business Improvement District, which represents businesses in Penrith town centre, said:
“Changes in business rates are going to be the death of many businesses, especially in hospitality, and at the very least a big kick in the teeth for everyone else. Don’t hide from it, please review your rates, speak with your accountant and join campaigns against it.”
Although business rates locally are collected by Westmorland and Furness Council, the council does not set the business rate levels. These are set nationally by government.
Alongside the business rates charged on businesses in the town centre and the town’s industrial estates covered by the Penrith BiD and Penrith Industrial BiD, businesses in those areas also pay an additional levy on their business rates to fund the Business Improvement Districts.
Despite the changes being implemented from April 2026, business rates relief schemes remain in place and can be applied for through Westmorland and Furness Council. These include Small Business Rate Relief (SBRR), which provides up to 100% relief for properties with a rateable value of up to £12,000, with tapered relief for values up to £15,000. The “grace period” for retaining SBRR after expanding to a second property has also been extended from one year to three years.
The Supporting Small Business Scheme provides support for businesses that lost some or all of their SBRR or Retail, Hospitality and Leisure (RHL) relief due to revaluation, capping bill increases.
A new scheme has also been introduced to cap bill increases for properties facing large rises at the 2026 revaluation.
Other reliefs available include mandatory relief for charities, empty property relief, and specific reliefs for electric vehicle charging points and film studios.
The Valuation Office Agency (VOA), which sets the rateable values of properties, said:
“An increase in your rateable value does not necessarily mean your business rates bill will go up by a similar amount.”
“Your local council will calculate your bill by multiplying your rateable value by the relevant multiplier set by the UK.”
“They will then determine whether to apply any reliefs you are eligible for.”
“For those seeing bill increases, reflecting many sectors’ post-Covid recovery, the government is providing a support package worth £4.3 billion over the next three years.”
The £4.3 billion support package includes:
• a £3.2 billion Transitional Relief scheme providing more generous support to the largest ratepayers, including airports and hospitality
• a Supporting Small Business scheme worth over £500 million to help the smallest businesses
• expanding the Supporting Small Business scheme to businesses who were eligible for the Retail, Hospitality and Leisure (RHL) relief, protecting independent pubs and shops as they transition to permanently lower tax rates. This additional support is worth £1.3 billion
• introducing new permanently lower tax rates for eligible retail, hospitality and leisure properties from April 2026, funded by a new higher tax rate on properties with rateable values of £500,000 and above
Businesses can check a property’s future rateable value and estimate their bill on the GOV.UK website at: https://www.gov.uk/find-business-rates
Then select "Add to Home Screen"
