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Small business rates relief: what the Budget changed

The 28 October 2026 Budget raises small business rates relief for retail, hospitality and leisure properties in England to £18,000 rateable value from April 2027. Who qualifies, when it starts, a worked example and what to do now.

If you run a shop, café, pub or other retail, hospitality or leisure business in England, the Autumn Budget on 28 October 2026 widened small business rates relief. From 1 April 2027, qualifying properties with a rateable value up to £18,000 pay no business rates (up from £12,000), with partial relief up to £21,000 (up from £15,000).

A row of independent shops and cafés on a UK high street under a blue sky

Photo: High Street Shops - geograph.org.uk - 6292051 by Des Blenkinsopp, CC BY-SA 2.0, via Wikimedia Commons

The Chancellor said around 70,000 businesses will stop paying business rates altogether. The change is not automatic for everyone, though, and the detail matters: which properties count, when it starts and how long it lasts. Here is what was announced, in plain English, and what to do about it now.

What changed for small business rates relief?

Small business rate relief (SBRR) is the main discount for small properties in England. Under the rules that apply today, a single property with a rateable value of £12,000 or less pays no business rates, and relief tapers away between £12,001 and £15,000.

The Budget package, set out in a letter to councils published on GOV.UK on 28 October, changes this for qualifying retail, hospitality and leisure properties:

  • 100% relief up to a rateable value of £18,000, tapering evenly to 0% at £21,000
  • Start date: 1 April 2027
  • End date: 31 March 2029, with the thresholds to be reviewed at the 2029 revaluation
  • More than one property: the limits that decide whether you keep relief on your main property are being replaced by a single England-wide figure of up to £29,999 for the same period (today it is under £20,000, or £28,000 in London)

The Budget papers apply the higher thresholds to qualifying retail, hospitality and leisure properties. Vape shops are excluded, and adult gaming centres stay on the old £12,000 and £15,000 limits. If your business is outside those sectors, such as an office-based firm, nothing in the papers moves your thresholds, so assume today's rules still apply to you.

What else was in the business rates package?

  • A real-terms freeze for retail, hospitality and leisure bills in 2027/28 and 2028/29: eligible bills rise by no more than inflation (CPI). Properties empty on 1 April of the year do not qualify.
  • More relief for pubs and live music venues: up from 15% to 35% for 2027/28 and 2028/29.
  • One more year of supporting small business relief for businesses still receiving it under the 2023 scheme.
  • New multipliers for 2027/28, including 39.7p for small retail, hospitality and leisure properties.

The regulations and official guidance have not been published yet. Councils will apply the final rules, so treat the figures as announced, not yet in force.

What this means for your business

A worked example: reading your own position

This is how we would go through it with a client. The rateable values below are illustrations, not real businesses.

1. Find your rateable value. It is on your business rates bill, or you can search your address with the GOV.UK "Find a business rates valuation" service.
2. Check your category. Ask your council whether your property is classed as retail, hospitality or leisure. A café or hair salon usually is. A back-office unit used by the same business may not be.
3. Compare against both sets of rules.
- A café with a rateable value of £13,500 gets 50% relief today (GOV.UK uses this exact example). From April 2027, if it qualifies as hospitality, it falls below £18,000 and would get 100% relief.
- A shop with a rateable value of £19,500 gets no SBRR today. From April 2027 it sits halfway between £18,000 and £21,000, so the even taper points to roughly 50% relief.
- An office with a rateable value of £13,500 is not retail, hospitality or leisure, so on the papers published so far it stays on today's rules: 50% relief.
4. Check you are claiming now. Relief is applied for through your council. If you qualify under today's rules and your bill shows no relief, ask why.

Your council's bill is the final word. Other reliefs, the inflation cap and any change to your property can all affect the amount.

Why the timing matters for cash flow

The new thresholds start in April 2027, not this winter. If business rates are a big cost for you, nothing changes on your next few bills. Plan your cash flow on what you pay today, and pencil in any saving only once your council confirms it.

What should you do next?

  1. Find your rateable value and note it alongside your current relief.
  2. Ask your council whether your property counts as retail, hospitality or leisure.
  3. If you have more than one property, check how the new £29,999 combined limit could affect you.
  4. Diary a reminder for early 2027 to check your 2027/28 bill when it arrives.
  5. Use the time to look at other fixed costs you can act on now, such as what your card machine provider charges you per transaction.

If you trade in Wales, Scotland or Northern Ireland, these changes do not apply to you. Each nation runs its own business rates system, so check with your council.

Frequently asked questions

Do I have to apply for the new small business rates relief?

Small business rate relief is applied for through your local council. Councils will set out how the April 2027 changes work once the regulations are published. If you already get SBRR, ask your council whether you need to do anything.

Does the £18,000 threshold apply to every small business?

No. The Budget papers apply it to qualifying retail, hospitality and leisure properties in England. Vape shops are excluded, and adult gaming centres keep the old limits.

How long will the higher threshold last?

It runs from 1 April 2027 to 31 March 2029, and the Government says it will be reviewed at the 2029 revaluation.

Want a second pair of eyes on your costs?

Business rates are only one fixed cost. Card fees are another, and many owners never check them. Book a free card fee review and we will go through your statement line by line. If you need to smooth cash flow before relief changes come in, we can also look at business finance options for you.

Call or WhatsApp 07777 175890.

Jos Finserv Ltd (company no. 14560046) is an independent broker. For business finance we are a credit broker, not a lender, and we may receive commission from providers. Approval and terms depend on your trading history. No obligation.

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Tell us how to reach you and we will come back with what is actually available for a business like yours. We are paid by the provider, not by you, so this costs you nothing either way.

  • We read your current statement and explain it in plain terms
  • No obligation, and no pressure to move if you are already well placed
  • One conversation, not a sequence of calls

Prefer to work it out yourself first? Use the card fee calculator, or check whether finance is worth exploring.

Jos Finserv Ltd is a broker, not a lender or a payment provider. We cannot guarantee that any provider will accept your business, and nothing here is a quote. Your details are used to respond to this enquiry and nothing else. See our privacy policy.

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