The Autumn Budget marked a historic event as the UK’s first female Chancellor of the Exchequer, Rachel Reeves, delivered Labour’s first budget in over 14 years. If you run a business in the UK and want to understand how your business rates may be affected, read on…
Were business rates affected?
The Chancellor has extended a relief scheme that was introduced during the COVID pandemic and designed to help the retail, leisure, and hospitality industries. These industries pay more than one-third of the business rates collected yearly, which amounts to roughly £9bn, a stark contrast to the sector’s 9% contribution to the overall economy.
“I will today provide 40% relief on business rates for the retail, hospitality and leisure industry in 2025-26 up to a cap of 110,000 pounds per business,” Reeves said.
Although this is good news for businesses in this sector, who had anticipated a complete reduction, this is still a drop from the 75% relief they currently benefit from.
Small business multipliers
The small business multiplier has also been frozen at 49.9p; this is the value that Local Authorities use to calculate the business rates you pay if the rateable value of your property is below £51,000.
High Street Vs Online
High street businesses have long complained that the rates system penalises them compared to online operators. From 2026, the Government intends to introduce permanently lower business rates multipliers for high street retail, hospitality and leisure properties. The Government plans to fund this through a higher rate for higher-value properties. It is currently unclear how this will be implemented in practice and will marry up with a revaluation in April 2026.
More Transparency
There has long been a call for reform in the UK’s business rates system, which would protect the high street, support investment, and be more suited for the 21st century. In response, the Government has published a business rates discussion paper setting out the priority areas for reforms and has invited all interested parties and stakeholders within these areas to participate in creating a fairer system.
What happens next?
If you are concerned by any of the announcements affecting business rates in the Autumn Budget, please do not hesitate to contact a member of the team. We’ll be happy to explore the options available to you.