Business rates can be one of the largest overheads for businesses, particularly those operating on the high street.
However, the recent Budget has brought in measures designed to support these businesses and reduce the burden through business rate savings.
What are the changes to business rates?
The headline announcement in the Budget has been the increase in the Small Business Rates Relief threshold for qualifying retail, hospitality and leisure (RHL) establishments in England.
From April 2027, the threshold for 100 per cent small business rates relief will increase from £12,000 to £18,000, while the threshold for tapered relief will increase from £15,000 to £21,000.
Eligibility is based on the property’s rateable value, not the size of the business itself. Therefore, some smaller traders operating from high-value premises may still not qualify, while others could see substantial savings.
For qualifying RHL properties that sit above the new thresholds, business rate bill increases will be capped by Consumer Price Index (CPI) inflation until 31 March 2029.
In addition to this, eligible pubs, social clubs and all but the largest live music venues will receive a 35 per cent reduction in their business rates for the 2027/28 and 2028/29 financial years. This is an additional 20 per cent discount on top of the 15 per cent relief framework established earlier in the year.
Although these measures do not take effect until April 2027, now is the time to assess how they may affect your business.
Businesses should review their rateable value and the reliefs available to them, then forecast their costs to understand if they can benefit from the rules.
The changes may also be worth factoring in if a business is considering relocation or expansion, as they could affect its financial planning.
How can we help?
Business rates relief can be a valuable source of savings, but eligibility and calculations are not always straightforward.
Our team of accountants can help you review your financial forecasts to reflect the upcoming changes to business rates.
With business costs continuing to rise in many areas, making sure you claim every relief available could make a meaningful difference to your bottom line.
