According to reports in the Telegraph on 18 September and Business Matters on 19 September, the Chancellor, John Healey, is considering raising the small business rates relief threshold from £12,000 to £17,096 at the Budget on 28 October. If that happened, thousands of small shops, cafes and workshops in England would stop paying business rates. Nothing has been announced. The Treasury says it does not comment on speculation.
01What does small business rates relief cover today?
Small business rates relief is for a business that uses one property. If that property has a rateable value of £12,000 or less, you pay no business rates at all.
Between £12,001 and £15,000 the relief tapers away. A property with a rateable value of £13,500 gets 50% relief. At £15,000 there is none.
Those are the rules on GOV.UK for England. Business rates are devolved, so Scotland, Wales and Northern Ireland run their own schemes.
According to the Telegraph, the £12,000 line has not moved for a decade.
02What has been reported
The Telegraph reported that Treasury officials have held workshops with business groups on reviving the high street. Two options are said to be under consideration.
The first is to raise the £12,000 threshold in line with inflation. That would take it to £17,096, with tapered relief on properties valued at up to £20,000.
The second is more transitional relief, to soften bills that rose sharply after the April revaluation. According to the Telegraph, some bills went up by as much as 80%.
The British Beer and Pub Association told Business Matters that a threshold of £18,000 would take 5,000 pubs out of business rates. The Federation of Small Businesses called removing small firms from the tax "an essential element of a pro-small business budget".
The Treasury's response, as quoted by both outlets, was that decisions on tax are for the Chancellor to set out at fiscal events, rather than commenting on rumour, speculation or proposals.
One measure is already confirmed. According to Business Matters, the Prime Minister, Andy Burnham, has pledged a 20% business rates cut for pubs, clubs and live music venues from April 2027. That is expected to save the average venue about £1,100 a year.
03What should you do now?
Nothing changes until 28 October, and it may not change then.
Check your rateable value on GOV.UK. If it sits between £12,000 and £20,000, this is the change to watch.
If your bill stays, plan for it. Business rates are a fixed cost, and a bill that jumped in April is a cash flow question before it is a tax question. Our guide to pub and hotel finance during the business rates review explains how lenders look at a rates bill. Where a bill has opened a gap, business growth finance can cover it while the Budget settles the question.
We covered the earlier Treasury review of business rates for pubs and hotels in August.
