Small firms in England that take on a second property will be able to keep Small Business Rate Relief (SBRR) on their main premises for up to 36 months rather than 12. The change applies where the second occupation starts on or after 27 November 2025, with effect from April 2026. The measure gives growing businesses a longer runway before losing relief on their original site. ([gov.uk](https://www.gov.uk/government/publications/52025-confirmation-of-budget-package-and-the-non-domestic-rating-multipliers-for-20262027/52025-confirmation-of-budget-package-and-the-non-domestic-rating-multipliers-for-20262027?utm_source=openai))
The statutory instrument amends regulation 2 of the 2023 SBRR Regulations to substitute a new paragraph (3). In brief, a second hereditament can be disregarded if it was occupied after the first and, on the day in question, the occupation of the second has not exceeded 12 months where that occupation began before 27 November 2025, or 36 months where it began on or after that date. This sits within the SBRR framework established by Schedule 4ZA to the Local Government Finance Act 1988 and the 2023 Regulations. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2023/1250/made?utm_source=openai))
The disregard remains subject to an important limit: the second property cannot itself be on the SBRR formula for the day in question. In statutory terms, hereditament B’s chargeable amount must not be calculated under paragraph 4(1)(a) of Schedule 4ZA. This preserves relief for the original property without duplicating SBRR across multiple sites for the same ratepayer. ([legislation.gov.uk](https://www.legislation.gov.uk/ukpga/1988/41/schedule/4ZA?utm_source=openai))
The instrument also updates rate demand notice wording. Paragraph 3 of Schedule 2 to the 2003 Demand Notices Regulations will refer to “Part A1” rather than “Part 1”, aligning bills with the restructured Schedule 7 of the 1988 Act. Part A1, inserted by section 15 of the Non‑Domestic Rating Act 2023 and further adapted by the 2025 Act, is now the home for England’s multipliers. Billing authorities should ensure their templates and explanatory notes reflect the Part A1 terminology. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2003/2613?utm_source=openai))
For ratepayers, the practical effect is a clearer expansion window. A micro‑retailer that began occupying a second unit on 2 December 2025 can keep SBRR on its original shop until up to 1 December 2028, subject to meeting the usual conditions and provided the second unit does not itself qualify for SBRR on the day concerned. This gives finance leads time to plan for the eventual taper out of relief. ([gov.uk](https://www.gov.uk/government/publications/52025-confirmation-of-budget-package-and-the-non-domestic-rating-multipliers-for-20262027/52025-confirmation-of-budget-package-and-the-non-domestic-rating-multipliers-for-20262027?utm_source=openai))
The change interacts with the 2026 Supporting Small Business (SSB) scheme. Government guidance confirms there is no second‑property test for SSB, but where a business is in a period of grace under SBRR rules, eligibility for 2026 SSB ends when that grace period ends. Authorities should apply SSB before other local supplements, consistent with the guidance issued for 2026. ([gov.uk](https://www.gov.uk/government/publications/business-rates-relief-2026-supporting-small-business-relief-local-authority-guidance/business-rates-relief-2026-supporting-small-business-relief-local-authority-guidance?utm_source=openai))
Billing authorities will need to update systems and returns. NNDR1 guidance for 2026/27 highlights the line capturing relief retained where a second property is occupied and references the 36‑month grace construct, informing forecasting and collection fund profiling. Authorities should also test that their software applies the 12‑ or 36‑month rule by occupation start date and updates bill narratives to the Part A1 multipliers. ([gov.uk](https://www.gov.uk/government/publications/national-non-domestic-rates-return-nndr1/nndr1-national-non-domestic-rates-guidance-notes?utm_source=openai))
The amendment concerns England. Wales is proceeding with its own non‑domestic rates changes from 1 April 2026, including a higher multiplier for large properties and a transitional relief scheme, under separate Senedd regulations. Cross‑border operators should not assume the English grace rule applies in Wales. ([gov.wales](https://www.gov.wales/written-statement-non-domestic-rates-support-2026-27?utm_source=openai))
The instrument is signed by Alison McGovern as Minister of State at the Ministry of Housing, Communities and Local Government, reflecting her current brief for local government finance. This situates the change within a wider programme of business rates reforms scheduled for 2026/27. ([gov.uk](https://www.gov.uk/government/ministers/minister-of-state--201?utm_source=openai))