Barnsley set to retain nearly £33m in business rates under system shake-up
Barnsley Council is forecasting it will retain nearly £33m in business rates income in 2026–27, as major national changes to the system come into force, including a revaluation of commercial properties and new rules aimed at protecting smaller businesses.
A report going before cabinet sets the council’s estimated local share at £32.887m, a key source of funding for local services which has been built into Barnsley’s medium-term financial plans.
Under the current business rates retention scheme, councils keep 49 per cent of the rates they collect locally, with the remainder passed to central government and other bodies. Barnsley is classed as a “top-up authority”, meaning it receives additional funding because the amount it raises locally falls below a government-set baseline.
From April 2026, the system is due to be reset as part of the government’s Fair Funding reforms. While the method used to calculate how much councils retain will change, finance officers say the overall impact on Barnsley’s funding is expected to be revenue neutral.
One of the biggest changes will be a national revaluation of business properties, carried out by the Valuation Office Agency. This reassesses the rateable value of every commercial property, meaning individual bills could rise or fall depending on how a property compares with national averages.
Council officers say early indications suggest many Barnsley businesses will not be badly affected, with increases expected to be modest and transitional protections in place to limit sharp rises. The revaluation will also apply to council-owned buildings.
The report also highlights the growing impact of reliefs and exemptions. Small business rates relief has expanded significantly in recent years, reducing the amount councils can retain, while charities — including schools that convert to academies — receive mandatory discounts on their bills.
Empty properties and business closures are another factor, with ongoing economic pressures making it harder to predict how much will ultimately be collected during the year.
Barnsley is also required to pass on all business rates collected in local enterprise zones. Two sites in the borough are expected to generate around £500,000 in 2026–27, which will be paid to the South Yorkshire Mayoral Combined Authority.
Cabinet is being asked to approve the forecast ahead of the council submitting its annual National Non-Domestic Rates return to government by the end of January. The position will then be monitored throughout the year, with any significant changes reported back to councillors as part of routine budget updates.