Free-to-enter museums are set to benefit from substantial reductions in their business rates after the Valuation Office confirmed it will no longer use notional receipts when assessing their rateable value. Arts Council England welcomed the change on 26 October, saying that for many free-entry museums the rateable value will fall to £1.

The decision follows a landmark tribunal case between the Natural History Museum and the Valuation Office. The museum had argued that its rate of £12.9 million was unrealistic because it operates at a loss to preserve collections that the public can view free of charge, and that it should carry a nominal rateable value of £1. The tribunal ruling established the legal precedent behind the change.

Previously, the Valuation Office used a receipts and expenditure method to estimate museums' rateable values, and for free-entry museums that included calculating notional receipts based on the admission charges they could hypothetically levy and their visitor numbers. That approach will no longer be used. The Valuation Office intends to review all affected museums and, where appropriate, alter the 2023 and 2026 Rating Lists by notice before 31 March 2027.

The change reflects years of campaigning by the museums sector, including the National Museum Directors' Council, the Museums Association and the Association of Independent Museums. The Association of Independent Museums said the move is likely to make a genuine financial difference to hundreds of museums for years to come by reducing a major bill. Arts Council England said the change would free resources that museums can channel into resilience, access and development, and pointed to its Museum Transformation Programme, Museum Renewal Fund and Museum Estate and Development Fund as part of its wider support for the sector.