The second rates change: why a revaluation is not the 2025 tax reform

01

One bill can contain several different changes

An independent school comparing two rates demands can see a large movement and attach it to the most prominent political explanation. In May 2026 that would risk combining distinct events. England’s removal of charitable rates relief from most private schools took effect in April 2025. A new property revaluation took effect in April 2026. A further amendment to one relief scheme was published on 26 May.123

Their financial effects can intersect, but they have different causes, eligibility tests and reference dates. A board needs the components before it can judge the cost pressure or explain a fee decision.123

This develops the affordability question in our May fees editorial. The additional evidence is the rates system beneath a general claim of higher costs. A school cannot derive its new liability by applying a single percentage to last year’s invoice, and families cannot infer the school’s total cost change from a national tax headline.23

Our analysis concerns England. Wales shares the valuation exercise but has its own relief framework; Scotland and Northern Ireland require their own treatment. A UK-wide conclusion drawn from an English billing letter would be misleading.23

02

The valuation clock looks backwards

The government’s revaluation guidance explains that the values effective from April 2026 reflect rental values at April 2024. A rateable value is an input into the calculation, not the amount a school pays. The multiplier and applicable reliefs then affect the bill. That creates an important timing distinction: a 2026 valuation can reflect earlier property conditions while the school is responding to current admissions and staffing pressures. The assessment date is not a claim about the school’s present trading performance.2

In practical analysis, the relevant unit is the rated property. A school may operate across premises with different assessments, uses or occupation histories. Comparing the sum of demands without reconciling those changes can produce a false like-for-like comparison. A new building, a separate nursery or an altered occupation arrangement may require a different explanation from a continuing classroom block.

Those are illustrations of possible complications, not claims about a particular school. The financial account should identify the property and the reason a component changed before it becomes a line in the fee narrative.

03

What changed on 26 May

The May information letter amended vacancy and reoccupation treatment under the 2026 Supporting Small Business Relief scheme, with effect backdated to 1 April. A subsequent change of ratepayer or vacancy would no longer itself remove eligibility. The letter also states that eligibility is still lost if the property becomes occupied by a charity or Community Amateur Sports Club. That last qualification is particularly important in a sector containing both charitable and commercial operators. The amendment is not a new general relief for independent schools.3

The scheme’s wider guidance links support to losses of specified reliefs at revaluation. Losing private-school charitable relief in 2025 is not interchangeable with losing Small Business Rate Relief or the other listed reliefs in 2026. A school should therefore establish its actual route into a scheme rather than treating the phrase ‘supporting small business’ as a description of organisational size. The billing authority’s assessment of the property and the governing conditions matter. A generic sector estimate cannot replace that evidence.4

04

The missing reconciliation

A useful financial paper would bridge the old bill to the new one through separate movements: the comparable property base, the revised valuation, the applicable multiplier and the relief or transitional treatment confirmed for that property. This is an editorial recommendation about explanation, not an invented statutory template. Its purpose is to reveal the element leaders can investigate.

A disputed assessment, an eligibility question and a higher national multiplier are different issues. Combining them in one exceptional-cost line hides both the decision and the responsible authority.

The same reconciliation prevents double counting. If the 2025 removal of relief is already in the recurring cost base, it cannot appear again as a wholly new 2026 increase. Equally, an earlier budget provision may have underestimated the eventual demand and require correction.

Distinguishing the forecast from the realised bill allows governors to see whether management anticipated the pressure accurately. It also helps a school separate a genuine external cost from a strategic choice to expand space or change services. None of these distinctions diminishes a real liability; they make it intelligible.

05

Affordability depends on the response

The connection to admissions is consequential. A school could meet an additional property cost through fees, accumulated resources, a change in use or other operating decisions, subject to its circumstances and obligations. The tax does not mechanically determine a particular fee increase. Nor does a successful valuation challenge establish that every planned saving is immediately available in cash.5

The official revaluation guidance directs ratepayers to check their details and use the relevant challenge process where appropriate. A review should follow the actual assessment and timetable, rather than presume an appeal has succeeded.5

By the end of May, the strongest conclusion was therefore narrower and more useful than a single estimate of a sector-wide rates shock. Schools faced a newly effective valuation system and a dated amendment with limited eligibility. The leadership task was to establish the school’s own reconciled liability and then explain its response alongside the full cost of the offer.

We would revise this assessment when a confirmed demand, relief decision or valuation outcome materially changed that reconciliation. Until then, certainty belongs with the published rule; the local financial effect remains a matter for the school’s evidence.

Leadership questions

Questions that turn the development into a governing conversation.

What we are monitoring next

Publication is the beginning of the watch.

• Confirmed 2026/27 demands and valuation outcomes.
• Further relief guidance or changes in property use.
• The next published multipliers and their effective year.
• A confirmed local demand, eligibility decision or successful valuation change could materially alter the cost bridge; national headlines alone cannot.

The continuing record

How the record develops

• After the Budget, a school’s rates plan still needs a property-level answer ↗

  Updates the earlier revaluation analysis with corrected future multipliers, targeted Budget support and the announced appeal-fee change.