Business rates: travel agents with a shop pay a lower rate

A travel agency with a shop on the high street pays business rates this year at 38.2p in the pound if its rateable value is under £51,000. An ordinary business property of the same value pays 43.2p. The government's guidance to councils names travel agents among the services that qualify for the lower rate. An agency run from an office that customers cannot walk into will not normally qualify, however much it sells.

Where the lower rate comes from

From 1 April 2026, the retail, hospitality and leisure relief that many shops had in recent years was replaced by two permanent lower multipliers. They apply to qualifying properties with a rateable value under £500,000, and they sit 5p below the standard ones. The figures for England in 2026 to 2027, from gov.uk's guide to working out business rates, are:

• Rateable value under £51,000: 38.2p for a qualifying shop, 43.2p for everyone else.

• Rateable value £51,000 to £499,999: 43p for a qualifying shop, 48p for everyone else.

There is no cash cap, which the old relief had. A small chain gets the lower rate on every branch that qualifies. The City of London sets its own multipliers, and Wales and Scotland run separate systems.

The old relief took 40 per cent off the bill, though, so a shop that had it can still pay more this year than last. Supporting small business relief may limit the rise.

The test is whether the public can walk in

The government's guidance to councils, updated on 30 March 2026, lists travel agents alongside post offices, ticket offices and dry cleaners. The condition is that the property is wholly or mainly used to serve visiting members of the public. Three things follow for an agency.

• Online sales do not disqualify a shop. The guidance uses the example of "a high street travel agency" that serves customers both in person and online. It is in scope if the main purpose of the property is serving people in person. Councils are told to judge the main use of the building, not to measure the share of sales made online.

• Appointments are allowed. A property does not fall out because customers have to book a time to come in.

• A back office is not a shop. Staff are not visiting members of the public at their own workplace, and premises set up to run an online business that the public cannot visit are outside the definition. An agency that takes every booking by phone and email from an upstairs office will normally pay the ordinary rate, though the council makes the call.

The council decides, applying the definition in the 2025 regulations. The gov.uk guide says that a business which received the old relief in 2025 to 2026 will usually be eligible for the new multipliers, and that you can ask your council if you are unsure.

What it is worth on one shop

Illustration, not a real client. A family-run agency on Walthamstow's High Street has a rateable value of £24,000. That is too high for small business rate relief, which tapers away between £12,000 and £15,000.

• At the ordinary multiplier of 43.2p, its bill for the year would be £10,368.

• At the lower multiplier of 38.2p, it is £9,168.

• The difference is £1,200 a year, before any transitional relief.

Now suppose the same agency gives up the shop for a first-floor office round the corner at the same rateable value, and serves customers by phone and email instead. Its sales are unchanged. Its premises no longer serve visiting members of the public, so it pays at 43.2p and the £1,200 goes. A move like that may still make sense on rent. The rates difference belongs in the sums.

Where it shows in the accounts

For an agency selling holidays in its own name, business rates are an overhead. HMRC's notice on the Tour Operators' Margin Scheme treats office costs such as rent as indirect costs, which stay out of the margin the VAT is worked out on. So a lower rates bill raises profit without changing the VAT. Our page on how a travel agency's margin and VAT are worked out covers the margin scheme in more detail.

Before the next bill

1. Read the multiplier on this year's bill. 38.2p or 43p means the council already treats the shop as qualifying.

2. If it shows 43.2p or 48p and customers can walk in, ask the council to look again, and explain how the shop is used.

3. If you are weighing a shop against an office, put the rates difference into the comparison alongside rent and footfall.

4. Before April, check gov.uk for the 2027 to 2028 multipliers. The lower rates are permanent, but the pence figures are set each year.

For a small agency deciding whether to keep its shopfront, the discount is now written into the rate, and it does not expire.

About the author

Harvey Dhillon is the founder and CEO of Zmartly, a UK accountancy firm for small businesses. He grew up in West London and began his career in investment banking finance at Barclays, before going full-time on Zmartly in 2020. He is a Chartered Management Accountant (ACMA, CGMA).

Featured photo by CardMapr.nl on Unsplash.