The government has published draft legislation to permanently cut business rates for retail hospitality and leisure properties from 2026.

The tax cut will be funded by a tax rise for the very largest business properties, such as online sales warehouses, the government added.

Until then, 250,000 retail, hospitality and leisure (RHL) properties will receive 40% relief off their business rates bills up to £110,000 per business to help smooth the transition to the new system.

This support is alongside the Budget announcement to freeze the small business multiplier, together with Small Business Rates Relief protecting over a million properties.

James Murray, Exchequer Secretary to the Treasury, said: ‘For too long the business rates system has been working against our high streets.

‘[This] is a major step towards our new system that will support retail, hospitality and leisure businesses on our high streets to succeed.

‘This Bill paves the way for a permanent cut to their tax rate, helping to level the playing field between them and online and out-of-town businesses.’