Business rates revaluation 2026: Impact of the 2026 revaluation on the data centre sector
The new 2026 Rating List will come into force on 1 April 2026, bringing changes in rates liability across all business sectors. The latest assessments will reflect changes in the rental market between 1 April 2021 and 1 April 2024, and the liability will be derived from the new multipliers announced in the Autumn Budget. This article focuses on the impact of these changes on the Data Centre (DC) sector.
03 March 2026
Market Context of the Changes
Demand for DCs has continued to expand rapidly since the last revaluation, driven by the transformation of the digital economy and the onward march of the AI revolution. The 2026 revaluation shows an overall 17% average increase in Rateable Value (RV) across England.
The strongest increases occurred in prime DC locations, particularly in Slough and London, where uplifts typically ranged from 25 to 50%.
Regional RV Movements:
- Northwest: + 9%
- Northeast: + 18%
- Midlands: +17%
- London: +16%
- Southwest: +17%
- Southeast: + 22%
Plant & Machinery (P&M) in Data Centres
DC assessments also include rateable plant and machinery. These items are valued in accordance with the changes in costs between valuation dates rather than rental evidence. While there is a wide range of P&M adjustments across the country, analysis of prime centres indicates an average increase of around 9% in P&M costs.
The rateability of DC P&M has been the subject of considerable litigation, with tribunal decisions confirming that certain components should not be rated. However, these reductions are not applied automatically, so without proactive action, businesses will fail to benefit.
The right to challenge the 2023 Rating List expires on 31 March 2026.
Business Rates Liability
Although rating assessments have risen, the revaluation is intended to remain fiscally neutral, with the £37bn national rates yield increasing only in line with the CPI. Rateable values across England grew by more than 19% between lists, allowing the Government to reduce business rate multipliers.
Standard Business Multipliers
Most DCs will fall under the Standard Multiplier (RVs over £ 51,000), set at 55.5p for 2025/26.
For 2026/27, this is set to fall to 48.0p, a 13.5% drop.
New Higher Value Multiplier
However, the Government has introduced a new multiplier for properties with RVs above £500,000, which applies to around 90% of UK DCs.
For 2026/27, this is set at 50.8p, an 8.5% reduction.
While this alleviates some of the increase in RVs, the net impact on liability will vary.
How Knight Frank can Support you
Knight Frank’s Business Rates specialists are among the leading advisors in the DC sector. We have successfully litigated against the Valuation Office Agency’s valuation approach to data centres and secured significant reductions for our clients.
If you have not yet reviewed your 2023 assessment, or would like strategic advice on managing your 2026 Rating List valuation and liability, our team would be pleased to assist.
