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UK's Healey raises business rates threshold for small firms - Finance news and analysis from Global Banking & Finance Review
Finance

UK's Healey raises business rates threshold for small firms

Published by Global Banking & Finance Review

Posted on October 28, 2026

1 min read

· Last updated: October 28, 2026

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UK Increases Business Rates Threshold for Small Businesses to £18,000

Key Changes to Business Rates and Relief for Small Businesses

Announcement by Finance Minister

LONDON, Oct 28 (Reuters) - British finance minister John Healey said on Wednesday he would raise the threshold at which small companies start paying business rates.

Details of the New Threshold

"I'm increasing the threshold for Small Business Rate Relief for retail hospitality and leisure businesses from £12,000 to £18,000 ($15,900-$23,900)," Healey said in his budget speech to parliament.

Understanding Rateable Value

The figures relate to "rateable value", the estimated annual rental value of a commercial property.

Impact on Businesses

Healey said the move will mean 70,000 businesses will not pay any business rates - a property tax charged on commercial properties to fund local services.

He said other businesses in the retail, hospitality and leisure sectors would see their rates frozen in real terms.

Additional Measures and Future Plans

Prime Minister Andy Burnham had said in July he would lower business rates for pubs, clubs and live music venues by 20% from April 2027.

Exchange Rate Reference

($1 = 0.7527 pounds)

Article Credits

(Reporting by David Milliken, writing by James Davey; Editing by Toby Chopra)

Key Takeaways

  • Full business‑rates relief now applies up to £18,000 rateable value, up from £12,000, benefiting an estimated additional 70,000 firms in retail, hospitality and leisure sectors (businessratechecker.com)
  • The change aligns with wider reform: RHL relief has been replaced by lower multipliers since April 2026 to ease burdens on small properties, while transitional relief schemes cushion rate shocks (post.parliament.uk)
  • Federation of Small Businesses research shows that raising SBRR thresholds spurs hiring and pay growth—28% of employers said they'd hire more, and 26% would boost pay if thresholds rose (startups.co.uk)

References

Frequently Asked Questions

What is the new business rates threshold for small businesses in the UK?
The threshold for Small Business Rate Relief has been increased from £12,000 to £18,000 for retail, hospitality, and leisure businesses.
How many businesses will benefit from the raised threshold?
The move will mean 70,000 businesses no longer have to pay any business rates.
What sector businesses are affected by the new threshold?
Retail, hospitality, and leisure sector businesses are affected by the increased threshold.
Will business rates change for other companies?
Other retail, hospitality, and leisure businesses will see their rates frozen in real terms.
What future changes were announced for pubs, clubs, and live music venues?
Business rates for pubs, clubs, and live music venues will be lowered by 20% from April 2027.

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