At the Autumn Budget in November, the government announced changes to business rates with the stated goal of supporting Retail, Hospitality, and Leisure (RHL) organisations, including many arts and cultural venues, by introducing new, lower rate multipliers used to calculate their bills.
However, our analysis of the overall picture reveals a much more complex situation: the actual business rates paid by most arts and cultural organisations will in fact go up – in some cases very significantly.
By modelling the impact of all the changes on real-life organisations, Campaign for the Arts (CFTA) has identified three critical threats from these changes to the UK’s cultural landscape:
☠️ Small venues are falling through the cracks
Some arts and cultural organisations in the lowest value buildings will face some of the highest percentage increases to their bills – posing an existential threat to a vulnerable part of the ecosystem.
🚚 Large cultural spaces will be treated like Amazon warehouses
Cultural venues in high-value buildings will fall into a new, higher business rates bracket, a category created to make large commercial properties pay more. In practice, some theatres and cinemas will now be taxed in the same bracket as the warehouses used by large online retailers the policy was meant to target.
"I will introduce permanently lower tax rates for over 750,000 retail, hospitality and leisure properties – the lowest tax rates since 1991, paid for through higher rates on properties worth £500,000 or more, like the warehouses used by online giants."
💣 The long-term plan is a ticking time bomb
Transitional Relief caps will ease the change over the next three years, but they only delay a major hike in business rates. The system fundamentally misvalues arts and cultural organisations, adding another layer of long-term financial risk that can only be addressed through structural reform.
Business rates are an important source of revenue for local authorities to deliver vital local services – including funding for the arts, which has already more than halved since 2010 by English councils. The balance of who pays most of the bill is important, and we welcome the government’s attempt to check this balance.
However, the current changes risk the financial stability of vital organisations from theatres and cinemas to music venues. This ultimately raises a crucial question about how we value these places for tax purposes: as optional luxuries that can be squeezed when times are tough, or as essential social infrastructure that underpin healthy, creative, and connected lives.
🏴 The setting and management of business rates is devolved to the administrations of Scotland, Wales and Northern Ireland. These changes apply specifically to business rates in England from April 2026.
TL;DR
🏠 All arts and cultural organisations in physical premises pay business rates, which their local council collects to use for services and infrastructure.
🧮 Business rates are calculated from an estimate of its annual rental value, a government-set multiplier, and discounts and reliefs.
🦠 Covid-era discounts for Retail, Hospitality, and Leisure (RHL) businesses, including arts and cultural organisations, will end on 1 April 2026.
📉 In the Autumn budget, the Chancellor announced new business rates multipliers, implying lower bills for RHL businesses.
📦 Under the new approach, all organisations in buildings valued over £500,000 will be treated the same.
⛰️ Property valuations are set to update in April, with substantial increases for most, including very steep rises of over 100% for some.
💷 Some very small venues will go from being exempt to having to pay. This could mean a sudden bill to pay which didn’t previously exist.
📈 Although the multipliers will be lower, the property prices being higher in reality means an increase for most organisations.
⏳ The government is providing transitional relief, via caps for how high an increase can be over the next 3 years. This will ease the increases temporarily.
💣 But these caps only delay the full impact. Once they expire, many arts organisations face much higher long-term bills, adding to an already challenging financial landscape.
What are business rates?
Business rates are a charge that is applied to anyone using non-domestic properties, such as pubs, shops, theatres, offices, and more. The charge is paid to the local council, much like council tax, and used to fund local services and infrastructure. Arts and cultural organisations that occupy physical buildings will need to pay business rates.
🧮 How are they calculated?
Business rates are calculated from three moving parts:
Value X Multiplier — Reliefs
🏷️ Value: The value of the property is first determined by how much it would cost to rent per year on the open market (its ‘rateable value’, or RV).
✖️ Multiplier: It is then multiplied by a ‘pence on the pound’ figure set by the government to give the total annual amount of business rate that will be owed.
🎁 Reliefs: To reflect the needs of (and need for!) different types of businesses, there is also a complicated system of discounts, reliefs and caps applied at the end.
🏘️ A note on charities and small businesses
Many arts and cultural organisations are registered charities. Charitable status entitles them to 80% off their business rates bill. Some councils offer additional relief or waive business rates for some charities entirely. However, individual councils make decisions on what they can offer to charities based on their budget needs, so this is not consistent and varies council by council.
While the charity discounts are not changing, it was also possible for charities to get the additional RHL relief on top while this was available, so they will be impacted too when it ends in April (see below).
Small businesses in properties valued at less than £12,000 are exempt from paying business rates, and those between £12,000-£15,000 currently have a graduated Supporting Small Business Relief (SSB relief) discount so that they pay from 0 to 100% of the rate between those values. This excludes charities, who cannot receive their 80% discount on top of this small business rate relief.
What's changing in 2026?
⚰️ Key cultural reliefs are about to disappear…
At the start of the COVID-19 pandemic, RHL businesses received 100% business rates relief, effectively freezing their bills. This support was gradually tapered: 66% from July 2021, then 50% in April 2022, with a cash cap of £110,000 per business.
Relief was bumped back up to 75% for 2023/24 and 2024/25, helping venues weather the twin storms of rising inflation and energy costs while recovering from the pandemic.
Then in the current year (2025/26), the relief was reduced to 40% – and from April 2026 it will end entirely.
🛡️ … but they are being replaced by new, lower multipliers
The government has introduced new business rates multipliers for Retail, Hospitality, and Leisure (RHL) businesses, replacing the previous system. For context, in 2025/26 there were two main categories:
🛖 Small Business (rateable value less than £51,000 per year): 49.9 pence on the pound
🏡 Standard (RV £51,000 or more per year): 55.5 pence on the pound
The Chancellor has announced reductions in business rates, including that RHL businesses will now have their own, lower multipliers than other types of businesses – if their building has a value of less than £500,000 per year. These new multipliers for 26/27 are:
🛖 Small RHL (<£51,000): 38.2 pence on the pound
🏡 Standard RHL (£51,000–£499,999): 43 pence on the pound
🏰 But all “high value” properties (£500,000+) will pay 50.8 pence on the pound next year, regardless of whether they are used for RHL or other types of activity.
At face value, this is a decrease in business rates from the previous base amounts, and sets a lower rate in principle for many arts and cultural organisations in the longer term.
However, for any arts and cultural organisations in the high value category (such as large West End theatres, or cinema multiplexes), the change points to a long term increase in business rates as it bundles them together with large warehouses, wholesalers, offices, and all other businesses operating from high valued properties.
And importantly, because the RHL relief that gave a 40% discount is ending, the bills that all of these organisations – both large and small – will receive next year will actually be higher, in some cases significantly so.
🚀 Property values are rocketing up…
In April 2026, rateable values of properties (RVs) will be updated by the Valuation Office Agency for the first time since 2023. Because COVID-19 temporarily depressed valuations in 2023 compared with 2017, many properties are now set for steep increases.
Across the sector, aggregated RVs are expected to rise by:
🎭 Theatres: 28%
🍿 Cinemas: 5%
🎤 Concert Halls: 36%
🪩 Night Clubs & Discotheques: 10%
Individual properties may vary significantly from these averages, which we explore below in our modelling.
🖼️ A note on museums and galleries
Interestingly, this data shows that museums and galleries rateable values are on average decreasing by 11% as they have been valued differently than other properties since 2023.
Instead of using features of the property like square footage, which is used for normal valuations, in the case of museums and galleries the Valuation Office switched to receipts and expenditure. This was done to acknowledge that museums and galleries often need to occupy very large and sometimes historic valuable buildings with space for their collections, but cannot afford to pay what would be the equivalent to renting such large and expensive spaces for other uses.
We can see based on these percentage increases in rateable values for other types of arts and cultural organisations, versus the decrease for museums and galleries, how great a difference this change in approach has made.
⏲️ … but being softened by temporary reliefs
The government is updating Transitional Relief (TR) to limit how much business rates can rise at once for organisations losing RHL discounts. TR caps are designed to smooth the impact of revaluations and prevent shock increases.
Previously, these caps were calculated based on the full base rateable value, before any discounts were applied. Under the new system, the cap is calculated after RHL relief, which is a positive change: it means the increase is now based on the actual bill businesses are paying, not an inflated theoretical amount.
For most arts and cultural organisations, this means next year’s business rates will rise only by the capped percentage, giving venues a predictable increase and some breathing space to adjust.
The caps for 2026–27 are set as follows (or £800, whichever is higher):
🛖 RV less than £20,000 per year (£28,000 in London)
- 2026–27: 5%
- 2027–28: 10% + inflation
- 2028–29: 25% + inflation
🏡 RV £20,001 (£28,001 in London) to £100,000 per year
- 2026–27: 15%
- 2027–28: 25% + inflation
- 2028–29: 40% + inflation
🏰 RV over £100,000 per year
- 2026–27: 30%
- 2027–28: 25% + inflation
- 2028–29: 25% + inflation
🎬🪇 A note on film studios and music venues
Since February 2025, film studios have their own temporary relief of 40%, which will be in place until 2034. The government has framed this as part of its wider strategy to support growth in the UK’s creative industries.
A high-profile campaign by publicans highlighted how rising bills could threaten the viability of pubs across the country. Music venues raised similar concerns. Many warned they were being forced to choose between closure or significantly increasing ticket prices that are already out of reach for some audiences. The Music Venue Trust has published an open letter to the government warning of an existential threat to the live events sector.
As a result of this campaigning, the government has introduced a 15% business rates discount for pubs and live music venues, alongside a cap limiting increases to inflation for the next two years. The 15% discount will apply after Transitional Relief or Small Business Rate Relief.
How will this impact arts and cultural organisations?
To understand what these changes could mean on the ground, we’ve modelled estimated business rates for a selection of theatres, music venues, cinemas, and multi-arts venues across the UK. The examples are anonymised but real, designed to surface the kinds of impacts arts and cultural organisations are due to face under the new system.
These estimates combine:
🏷️ Publicly available rateable values (RV) from a government lookup tool
✖️ New multipliers for different sized and categorised properties
🧢 Transitional Relief caps
🪇 The new music venue discount
☠️ Small venues are falling through the cracks
For very small arts and cultural organisations, subtle changes in building valuations can trigger the sudden loss of previous reliefs or exemptions from business rates. This means that the smallest organisations can face the largest percentage increases.
Left unchanged, the combined effect of ending RHL relief and rising property valuations would have been catastrophic. In our modelling, a Grassroots Music Venue in York faced an immediate 727% increase in its bill. A Small Variety Theatre in Devon and Community-run Cinema in London, which had previously paid nothing, would have faced new annual bills of £7,640 and £13,370 respectively. Transitional Relief caps soften that blow considerably, but they don’t eliminate it, and in some cases the guidance on how they apply is worryingly unclear.
For the Variety Theatre and Community-run Cinema, our interpretation of the government’s guidance suggests a bill rising from £0 to £800 next year, reaching nearly £2,500 by 2028/29 – an entirely new cost that simply didn’t exist before. For the Grassroots Music Venue, even after Transitional Relief and the new music venue discount, losing both SSB relief and the RHL discount still results in an immediate 80% increase.
This is not just an accounting problem, but a cultural one. Our 2024 report The State of the Arts found that:
📈 Before Covid, small venues had the highest growth in events of any venue size
🏀 Small venues have struggled hardest to bounce back, and still haven’t returned to pre-Covid attendance
🎟️ Small venues have seen the sharpest real-terms fall in ticket prices since Covid
These are organisations already operating on tight margins. Faced with sudden new bills, we fear that many will be forced to either cut programming, raise ticket prices, or close entirely. The new system, as currently designed, makes all three more likely.
🚚 Large cultural spaces are being treated as warehouses
When the Chancellor announced these reforms, she pointed to the warehouses used by large online retailers as the sorts of businesses that should shoulder more of the burden, freeing up relief for the small businesses, pubs and cultural venues that make up our villages, towns and cities. But in the new system, any building with a rateable value of over £500,000 is included in this higher-rate bracket, paying 50.8 pence in the pound, regardless of whether it’s being used to stage productions or store parcels.
In practice, this means several of the arts and cultural organisations in our modelling end up in the same tax bracket as an Amazon fulfilment centre – just as a new lower rate is introduced for most in the sector. A Multiplex Cinema in Greater Manchester sees its rateable value rise by 27%, but faces a 30% increase in its bill next year. As transitional relief tapers away, its bill will reach £308,864 by 2028/29 – nearly double what it pays today.
Many West End Theatres face an initial 30% rise, eventually climbing to increases of over 110%. This month’s Theatre in the UK 2026 report found that since 2019, real-terms ticket prices for West End shows have declined by 8.9%, even as production, staffing, and building costs have risen sharply. We can now add business rates to that list.
As we noted earlier in our aside on museums and galleries, a valuation method that accounts for what an organisation actually does, rather than what its building might fetch on the open market, already exists. The question is why similar consideration hasn’t been extended here.
💣 The long-term plan is a ticking time bomb
While the new Transitional Relief caps soften the impact over the next three years, they ultimately delay rather than prevent large increases in business rates. This creates a long-term risk to the financial stability of the arts and cultural sector.
The Chancellor’s change to business rates is designed to establish a long term difference between the RHL sector and other types of businesses. Due to permanently lower multipliers, the government’s expectation is that organisations such as theatres, cinemas and music venues (except those valued above £500,000) will pay less in business rates in the long run, avoiding the yearly cliff edge created by temporary relief schemes.
However, our modelling suggests that rising property valuations are outpacing the benefit of these lower multipliers. For the next 3 years, most will be increasing at the capped % rate set by the new Transitional Relief. But if the relationship between the rateable value and actual, felt value of these organisations is left unchecked, eventually it will translate into extremely steep increases in business rates bills.
Typical examples included a Multi-arts Venue in Norwich and Boutique Cinema in Liverpool. Both begin with the capped 15% rise next year, but ultimately face increases of around 86% once the transition period ends. Other venues in our modelling face even steeper trajectories: an Independent Repertory Cinema and a Contemporary Theatre in London both see bills rising by 135%, while an Independent Cinema in Bristol faces a 86% increase, and 90% for a Receiving Theatre in Portsmouth.
In other words, the system may smooth the shock in the short term, but without addressing how cultural organisations are valued for tax purposes, it simply postpones the problem.
📊 Full modelling results
What should we do about it?
At the Campaign for the Arts, we believe that theatres, cinemas, music venues, and other spaces – including pubs – where people can come together to experience arts and culture are essential social infrastructure and need to be protected. Many of these organisations are already in financially precarious positions, and haven’t recovered from the pandemic. We don’t want to see access to events made unaffordable, or an acceleration of an already concerning trend in venue closures.
Properly funding local services is vital, and we recognise the government’s attempt to rebalance the scales. However, taxing a theatre or a cinema multiplex using the same logic as a warehouse used by large online retailers ignores the unique value they bring to our lives.
Lower multipliers are a step in the right direction, but they are a hollow victory if the property valuations they are applied to remain unsupportably high. Protecting the sector will require more than temporary fixes.
🔍 The short term
April represents a cliff edge for many organisations across the sector. For some, particularly small venues losing exemptions or relief thresholds overnight, the increases are set to be immediate and severe.
Action is needed now to prevent either a loss of important cultural spaces, or price increases that restrict access to cultural experiences. The government must work with the sector to ensure that the transition to the new system does not inadvertently push vulnerable venues into financial crisis.
“Theatres are anchor institutions for town and city centres [...] Without proportionate and targeted business rates support, the result will be reduced activity, job losses and weaker local economies."
👓 The medium term
We need a fundamental change in how cultural organisations are valued for tax purposes. Lower multipliers alone are not enough. We advocate for a review of how properties are valued, taking into account the approach already taken for museums and galleries, to create an updated system that ensures fairer and sustainable rates.
Using a building to stage a play or screen a film is not the same as using it to sell goods; our tax system should recognise that distinction.
“This sector has done all it can to keep music live in our communities, it now needs permanent protection, structural reform, and leadership that recognises grassroots venues as essential national infrastructure."
🔭 The long term
These policy decisions reveal what our society ultimately values. The way we tax cultural spaces is a statement about whether we consider them essential or expendable.
For the arts to thrive – for us all to thrive – we need a culture shift in how our society values culture. You can help make it happen by joining the Campaign for the Arts, for free, and adding your name to the 250,000 citizens already standing up for the arts.
Further reading
Campaign for the Arts, What did the 2025 Autumn Budget mean for the arts?
HM Treasury, Budget 2025: Retail, Hospitality and Leisure Factsheet
UK Government, Introduction to Business Rates
Music Venue Trust, An Open Letter To The UK Government
UK Government, Find a property (check your own local venues’ changing RV)
