Home / Counting the cost – the effect of increasing non-domestic rateable values on premises licence annual fee
9th April 2026
Claire Morris, Associate
On 1 April 2026, new non-domestic rateable values (NDRV) for premises took effect. As a result, some operators may be subject to an increase in their premises licence annual fee. The increase in annual fees will be felt particularly by those premises used primarily or exclusively for on-sales of alcohol and find themselves moving into annual fee Bands D and E. Operators are advised to confirm their annual fee for 2026. Failure to pay the correct annual fee on time may lead to the suspension of the premises licence.
Under the Licensing Act 2003, premises licence holders are subject to a local authority annual fee that is payable each year on the anniversary of the original grant of the premises licence [1].
The annual fee is determined by which one of five NDRV ranges (known as Bands A – E) the premises falls in. In addition, the standard annual fees for premises in Band D and E are subject to a multiplier of x2 and x3 (respectively) where they exclusively or primarily sell alcohol for consumption on the premises (on-sales). Premises that do not exclusively or primarily sell alcohol, such as restaurants and certain types of bars for example, are not subject to the multiplier.
[1] Note also that additional fees may also apply for large scale events of 5000 or more persons.
An increase in a premises’ NDRV on 1 April 2026 might be enough to move a premises up into the next annual fee Band.
In this situation, this shift will result in an increase of up to £115 in the standard annual fee, depending on which Band your site is currently in.
However, due to the effect of the multipliers, the biggest changes will be felt by premises that were in Band C or Band D that exclusively or primarily sell alcohol, and find themselves moving up the Bands. Such premises finding themselves moving up a Band (from Band C into Band D, or from Band D to Band E), will also find their annual fee has, on average, doubled [2].
[2] The local authority application fees for new premises licences or to substantially vary an existing premises licences are also similarly dependent on the NDRV and will be affected where premises find themselves moving up the Bands. Please note that the value of annual fees and application fees differ, and application fees are not set out in this article.
Local authorities vary considerably in their approach to notifying premises licence holders when the annual fee is due. Some will issue invoices or simple reminders. Others may do neither and rely on the premises licence holder know when the fee is due and the amount. Failure to pay correctly on time can lead to the suspension of the premises licence. Notification of the suspension may be the first time an operator receives correspondence from their local authority confirming the annual fee is (over) due. Operators may also become aware of the suspension as a result of a visit from their local licensing officer over a weekend, and this may cause significant business interruption.
Once a premises licence is suspended, the premises cannot operate its licensable activities until the suspension is lifted. A premises may continue to operate non-licensable activities, including any exemptions that apply to regulated entertainment. For example, a restaurant can supply of hot food / hot drink between 5am and 11pm, and play background music. In such circumstances, operators should take clear and demonstrable steps to ensure licensable activities do not take place, least of all in case there are required to produce evidence of this by the licensing authority. For example, licensing officers may require the production of till information to confirm alcohol sales did not take place during the period of suspension.
Changes in the annual fee are unavoidable, unfortunately. We would suggest operators check when their annual fee is due and whether the amount has changed.
Sources: https://www.gov.uk/government/publications/alcohol-licensing-fee-levels/main-fee-levels