Small firms in England have been handed a longer runway to scale. A new statutory instrument made on 7 January 2026 and laid before Parliament on 12 January extends the Small Business Rate Relief (SBRR) grace period when a company opens a second site. From 1 April 2026, businesses that first occupy a second property on or after 27 November 2025 can keep SBRR on their main premises for up to 36 months instead of 12. The instrument was signed by Alison McGovern, Minister of State at the Ministry of Housing, Communities and Local Government.

SBRR is designed for ratepayers who occupy a single property in England and whose rateable value is modest. Under the 2023 regulations, properties with a rateable value up to £15,000 can receive relief, with 100% relief up to £12,000 and a taper thereafter. Crucially, the normal rule is ‘one property only’, which is why the grace period matters when a second site is added. Source: the Non‑Domestic Rating (Small Business Rate Relief) (England) Regulations 2023. ([legislation.gov.uk](Link

The updated grace works like this: if you already occupy Property A and then start occupying Property B on or after 27 November 2025, you can ignore B for up to 36 months when deciding if you still qualify for SBRR on A. There is a condition that B’s bill cannot itself be calculated using the SBRR formula, and the extension applies to chargeable days from 1 April 2026. In short, you can trial a second site without sacrificing relief on your first-for three years rather than one.

This change sits alongside wider business rates reforms due in 2026/27. Government confirmed new multipliers from April 2026, a redesigned transitional relief scheme, and a Supporting Small Business scheme to cap bill increases for firms losing SBRR. For 2026/27, the small business multiplier is set at 43.2p, with new ‘retail, hospitality and leisure’ multipliers and a high‑value multiplier for properties with a rateable value of £500,000 and above. Source: MHCLG Business Rates Information Letter 5/2025. ([gov.uk](Link

What does that mean in cash terms? Take a studio with a £12,000 rateable value: at the published 2026/27 small business multiplier, the gross bill would be around £5,184 before reliefs. If that studio currently pays £0 under SBRR, losing relief would add roughly that amount to annual outgoings. With the new 36‑month grace, a business that opens a second micro‑unit on, say, 10 December 2025 can keep SBRR on the first site for years two and three as well-potentially saving about £10,000 over that period before any supplements or local factors. Figures are illustrative; actual bills vary by valuation, eligibility and local charges. ([gov.uk](Link

Now consider a retailer with a £14,500 rateable value. Their unrelieved bill at 43.2p would be c. £6,264. Under today’s rules, many in this band receive tapered SBRR, so the loss of relief after a year can be a sharp jump. Extending the grace to three years smooths the cashflow while the second unit finds its feet and gives lenders more comfort when assessing expansion plans. Again, real outcomes depend on the valuation list, transitional rules and any sector‑specific reliefs. ([gov.uk](Link

Accountants we speak to suggest a few practical steps. Check the exact date you first took on and occupied the second property; the 36‑month clock only applies if occupation begins on or after 27 November 2025. Keep clear evidence of occupancy dates in your files. Confirm that the second site is not itself being billed on the SBRR formula. Build scenarios with and without SBRR from month 37, and factor in the 2026/27 multipliers, the transitional relief supplement and any retail, hospitality and leisure multipliers that may apply to your sector. If you are mid‑lease negotiation, consider how the 36‑month window lines up with rent‑free periods and fit‑out timetables.

There is also a technical tidy‑up to billing. The instrument amends the Council Tax and Non‑Domestic Rating (Demand Notices) (England) Regulations 2003 so bills reference “Part A1” of Schedule 7 to the 1988 Act, aligning notices with rating law changes passed since 2023. It is administrative rather than a change to liability, but it should reduce confusion when new multipliers appear on bills from April 2026. For context on the new multipliers framework, see the Non‑Domestic Rating (Multipliers and Private Schools) Act 2025 and supporting briefings. ([lordslibrary.parliament.uk](Link

Devolution matters. The extension described here applies to England. Wales has set out a different package for 2026/27, including differential multipliers and its own transitional relief arrangements, so Welsh ratepayers should follow Welsh Government guidance rather than assuming the English change applies. ([gov.wales](Link

For SME owners, the message is straightforward: if you are growing into a second site, you now have three years to make it work without losing relief on your first property-provided your second site was first occupied on or after 27 November 2025 and you meet the other conditions. Use that time to bed in operations, keep careful records, and plan for the point when the grace expires. If in doubt, ask your local authority or a rating adviser to confirm how the rules apply to your bill. And do it well before 1 April 2026, when the wider 2026/27 regime starts to bite. ([gov.uk](Link