The Autumn Budget and Empty Commercial Property Business Rates
Recent business rates announcements have often focused on occupied shops, hospitality venues and leisure premises. These are under increasing pressure from a range of factors, including the spiralling cost of living and employment challenges. For owners of empty commercial property, however, the more useful question is whether the cost of keeping a unit vacant is likely to change.
The Autumn Budget is scheduled for 28 October 2026. This article is being published before the Chancellor’s announcement, so any discussion of possible Budget measures is necessarily speculative. Anything affecting future empty property business rates will not be confirmed until the day of the Budget itself.
However, several important business rates changes have already applied since April 2026. This article joins the speculation about the future, but also explains what these existing changes mean for commercial property owners. Business rates are devolved, and we’ve focused our update on England. Property owners in Scotland, Wales and Northern Ireland should check the rules that apply to them.
What Might Change for Business Rates in the Autumn Budget
Pre-Budget predictions should always be treated cautiously. Some reports reflect discussions between the Treasury and business groups, while others amount to little more than political gossip.
Some commentators suggest the Chancellor is considering raising the rateable value threshold for Small Business Rate Relief. One figure being mentioned is an increase from £12,000 to £18,000, which could remove more small premises from business rates altogether. The British Beer and Pub Association has said, for example, that an £18,000 threshold could take around 5,000 pubs out of the system entirely.
Commentators have also noted that the Budget could extend transitional relief, protecting businesses from any sharp bill increases that followed the April 2026 revaluation. Transitional relief does not change a property’s rateable value, but it can limit how quickly an increase feeds through into the amount payable.
The government has already announced a 20% business rates reduction for pubs, clubs and live music venues from April 2027. This is legislated already, so it is not affected by the Autumn Budget. Hospitality representatives are, however, pressing for comparable support for restaurants, cafés and hotels, and some industry insiders believe the Budget could extend the planned reduction.
Some insiders are reporting that the government could fund further support by placing a greater burden on large warehouses or other high-value commercial properties that aren’t public-facing. Critics have argued that a broadly applied increase isn’t targeted enough to achieve the desired effect.
None of these rumours changes the current business rates position. Any eventual announcement will need to be checked against the detailed eligibility conditions, implementation date and treatment of occupied and unoccupied premises.
What Might Budget Changes Mean for Empty Commercial Property
An announcement about business rates support for shops, hospitality businesses or smaller firms will not necessarily reduce the cost of holding a vacant commercial building.
Most relevantly, some commentators expect Empty Property Relief to face closer scrutiny. No new measure has been confirmed, but the rules were already tightened in April 2024, when the minimum period of genuine reoccupation needed to reset the relief increased from six to 13 weeks.
More recently, the Court of Appeal rejected an artificial “box shifting” arrangement because it did not amount to beneficial occupation. Against that background, some commentators expect the Autumn Budget to include tougher action against schemes designed solely to create the appearance of occupation.
Commercial property owners should therefore wait for the detailed Budget documents before making assumptions. Check whether each measure applies to occupied or unoccupied premises, when it takes effect and how it interacts with existing reliefs. A widely reported business rates reduction will not necessarily make an empty building cheaper to hold.
Did the 2026 Business Rates Revaluation Change Your Exposure?
The business rates revaluation results came into effect on 1 April 2026. It introduced new rateable values for more than two million non-domestic properties in England and Wales, based on estimated open-market rental values as at 1 April 2024. A property’s rateable value is not its business rates bill. The latter is calculated by multiplying the property’s rateable value by the applicable business rates multiplier. Reliefs, exemptions and transitional arrangements may then alter the amount payable.
A vacant property is likely to have a different business rates liability in 2026 than in previous years. This can happen even if nothing has physically changed about the building. Its new rateable value may be higher or lower, the applicable multiplier may have changed, and its entitlement to relief may depend on whether it is genuinely occupied. Property owners should check their new rateable value.
Commercial property owners should check the 2026 rating list rather than relying on an earlier bill or valuation. They should confirm that the Valuation Office Agency has recorded the correct property details, including the floor area, use, layout and any other features that may affect the valuation. It can also be useful to compare the assessment with similar nearby premises. Owners should also confirm which business rates multiplier applies. A correct rateable value can still lead to an unexpected liability if the property’s multiplier has been assigned incorrectly. Professional rating advice may be appropriate to assess whether the valuation should be corrected or challenged.
Why the New Business Rates System Makes Occupancy Important
England has introduced lower business rates multipliers for qualifying retail, hospitality and leisure (RHL) properties with rateable values below £500,000.
From April 2026, qualifying occupied properties with a rateable value below £51,000 are charged using a small business RHL multiplier of 38.2p. Those with a rateable value from £51,000 to £499,999 use the standard RHL multiplier of 43.0p. Properties with a rateable value of £500,000 or more do not qualify for either lower RHL multiplier.
These figures are lower than the corresponding national multipliers, but with an important qualification: the lower retail, hospitality and leisure multipliers apply only to occupied properties. Once the Empty Property Relief period ends, an unoccupied property returns to the applicable national multiplier. This applies even where the building was previously used as a shop, restaurant or leisure venue and is expected to return to that use in future.
Does Leaving a Retail Unit Empty Mean Losing the Lower Multiplier?
In most cases, yes. As outlined above, an empty retail unit will not continue to receive the lower retail, hospitality and leisure multiplier merely because it was previously used as a shop or is being marketed for another retail occupier.
A qualifying occupied shop with a rateable value below £500,000 may fall within one of the lower retail, hospitality and leisure multipliers. If the shop becomes vacant, it may initially receive Empty Property Relief, but once that relief period expires, government guidance states that the property reverts to the relevant national multiplier.
What Happens When Empty Property Relief Runs Out?
Most empty commercial properties receive an initial three-month period during which business rates are not payable. Qualifying industrial premises can normally receive six months in total.
Once that period ends, the owner will generally become liable for business rates again. In many cases, you will still have to pay full empty property rates, even if the building produces no rental income.
Some properties remain exempt after the initial period. Examples can include listed buildings, properties with a rateable value below £2,900 and properties held by charities or community amateur sports clubs where the next use is expected to meet the relevant qualifying conditions. Owners should check the current rules and their property’s circumstances rather than assuming an exemption applies.
The end of Empty Property Relief can create a substantial holding cost where:
- A commercial letting is taking longer than expected.
- A sale has stalled.
- Redevelopment or refurbishment has been delayed.
- The property is awaiting planning permission.
- A unit is being held vacant as part of a wider asset strategy.
- There is no immediate commercial occupier.
Business rates are only one part of the cost. Owners may also face additional insurance requirements, utilities, security, maintenance and deterioration risks. ASTOP’s guide to the risks of leaving a commercial property empty examines these wider issues.
The important point is to identify the expiry date before it arrives. Waiting until a full rates bill has been issued can leave fewer practical options for managing the vacant period.
Could Temporary Occupation Change the Position?
Temporary occupation can change the business rates position, but it is not an automatic route to relief. The outcome depends on who occupies the property, how it is used and whether that use satisfies the relevant legal and practical requirements.
Factors that need to be considered include:
- The identity and status of the occupier.
- The activities carried out at the property.
- Whether the occupation is genuine and beneficial.
- The proportion of the premises in active use.
- The rateable value and property type.
- The relief for which the occupier may qualify.
- The evidence the local authority requires.
- The terms of the tenancy or licence.
The recent Court of Appeal decision on “box shifting” underlines the need for genuine occupation. Moving items into a property solely to create the appearance of use is not the same as an organisation occupying premises for a real operational purpose.
Legitimate temporary or meanwhile occupation is different. A charity might use a vacant shop for community services, an office for administration, or an industrial unit to store and distribute materials connected with its charitable work. The precise arrangement must suit the charity, the property and the landlord’s longer-term plans.
Owners considering temporary occupation should therefore focus on real use, clear documentation and an occupier who can demonstrate the value of what is happening at the property.
Charitable Rate Relief Remains Important
Eligible charities can receive 80% mandatory business rates relief where a property is occupied and used wholly or mainly for charitable purposes. The relevant local authority may choose to provide additional discretionary relief.
Genuine occupation by an eligible charity can therefore materially change the business rates position. However, charitable status alone is not enough. The property must be occupied, and its use must satisfy the qualifying conditions.
A landlord should not assume that placing a charity’s name on a tenancy or storing a few items in a building will secure relief. Local authorities may ask for evidence of occupation, the activities taking place and the connection between those activities and the charity’s purposes.
A carefully managed arrangement can provide charities and good causes with premises and space while helping an owner keep a vacant building in productive use. It must be based on genuine charitable activity, not an artificial attempt to avoid business rates.
The Budget Will Not Remove the Need for an Empty Property Strategy
Budget changes can alter multipliers, thresholds, reliefs and individual bills. They do not solve the underlying problem of prolonged commercial property vacancy.
Owners need a plan for the period between a commercial tenant leaving, Empty Property Relief expiring and the building’s next long-term use beginning. That gap may last a few months or much longer if a letting, sale, refurbishment or redevelopment is delayed.
An effective empty property strategy should consider:
- The current rateable value and expected business rates liability.
- The date on which Empty Property Relief ends.
- Insurance and security requirements.
- Maintenance and utility costs.
- Planned works or redevelopment.
- The likely timetable for a commercial letting or sale.
- Whether a suitable temporary use is available.
- How quickly the owner may need to recover possession.
Temporary charitable occupation can be one option for suitable properties. It can keep space in active use while a longer-term plan continues, without requiring the owner to commit to a conventional commercial lease.
The arrangement must still be structured properly. The charity needs premises it can genuinely use, while the owner needs sufficient flexibility to proceed with a future letting, sale or redevelopment.
What Property Owners Should Check Now
Commercial property owners don’t need to wait for the Autumn Budget to review their position. The April 2026 changes are already in effect, and a vacant property may already be accumulating a different liability.
Check the following:
- The property’s 2026 rateable value. Confirm that the valuation and property details are accurate.
- The applicable multiplier. Do not assume the multiplier used while the property was occupied still applies after it becomes empty.
- The Empty Property Relief period. Record when the property became vacant and when the three-month or six-month period expires.
- Any continuing exemption. Check whether the building falls within one of the limited categories that remain exempt.
- The effect of the property’s former use. A previous retail, hospitality or leisure use does not normally preserve the lower multiplier while the premises are empty.
- The likely length of the vacant period. Calculate the cost of remaining empty until the expected letting, sale, refurbishment or redevelopment date.
- The suitability of temporary occupation. Consider whether the premises could support genuine interim use without interfering with plans.
- Any eventual Budget announcement. Check the published eligibility rules rather than relying on headlines, political statements or pre-Budget reports.
- The need for professional advice. Seek property-specific rating and legal or tax advice when liability is significant, or the position is unclear.
How ASTOP Helps Owners Manage Empty Commercial Property
ASTOP works with landlords, property companies and asset managers to place suitable empty commercial premises with vetted charities and good causes.
These arrangements provide charities with useful temporary space while helping owners keep vacant buildings occupied for a genuine purpose. Occupation can be structured around the owner’s plans, including a commercial letting, sale, refurbishment or redevelopment.
ASTOP helps identify an appropriate occupier, establish how the property will be used and manage the practical relationship between the parties. The aim is to create a genuine, flexible arrangement that supports the charity and makes productive use of otherwise empty space.
Any business rates outcome depends on the occupier, the property’s use, its rateable value and the decision of the relevant local authority. Owners can learn more about ASTOP’s support for landlords with empty commercial property and its approach to business rates reduction.
Frequently Asked Questions
Will the Autumn Budget Change Business Rates for Empty Commercial Properties?
Reports about possible changes are speculative and should not be treated as government policy. Once the Budget is published, property owners should check the detailed rules. Support announced for small businesses, retailers or hospitality operators may apply only to occupied premises and may not reduce the rates payable on an empty commercial property.
How Long Can a Commercial Property Be Empty Before Business Rates Are Payable?
Most empty commercial properties receive three months of Empty Property Relief. Qualifying industrial properties can normally receive six months in total.
After the relevant period expires, business rates are generally payable again unless the property qualifies for a continuing exemption.
Do Empty Shops Qualify for the Lower Retail Business Rates Multiplier?
No. The lower retail, hospitality and leisure multipliers introduced in England from April 2026 apply to qualifying occupied properties. Once Empty Property Relief ends, an empty shop generally reverts to the applicable national multiplier, even if it is being marketed for another retail occupier.
What Happens When Empty Property Relief Ends?
The owner will generally become liable for business rates once the initial relief period expires. Certain properties remain exempt, including some listed buildings, low-value properties and premises held for qualifying future use by charities or community amateur sports clubs.
How Has the 2026 Revaluation Affected Empty Commercial Property?
The 2026 revaluation introduced new rateable values from 1 April 2026 based on estimated rental values as at 1 April 2024. Owners should check the new rating list.
Who Pays Business Rates When a Commercial Property Is Empty?
The position can depend on the lease or occupation arrangement, but the occupier usually pays business rates while a property is occupied. When a property becomes empty, liability normally passes to the owner.
Can a Charity Occupying Commercial Property Receive Business Rates Relief?
An eligible charity can normally receive 80% mandatory business rates relief where it occupies a property that is used wholly or mainly for charitable purposes. The local authority may also award additional discretionary relief.
Can Temporary Occupation Reduce Business Rates on an Empty Property?
Yes. Temporary occupation can change the business rates position where the occupation is genuine, and the occupier qualifies for an applicable relief. Charitable occupation is one potential option for suitable premises.
Have an Empty Commercial Property?
Share the property details with ASTOP to find out whether temporary charitable occupation could be suitable while you plan its longer-term use.
