Small Businesses: Business Rates
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of inflation on the Small Business Rate Relief threshold; and whether she plans to bring forward proposals to uprate the threshold in line with inflation.
Answered by Dan Tomlinson
Business rates raised a reported £26.4bn billion in 2024/25 and make up a quarter of Local Authority core spending power. They support critical local services, including child and adult social care.
Over a third of properties (more than 700,000) with rateable values (RVs) under £12,000 pay no business rates as they receive 100 per cent Small Business Rate Relief (SBRR). An additional c.60,000 properties, with RVs between £12,000 and £15,000, benefit from reduced bills as SBRR tapers.
At the 2024 Autumn Budget, the Government decided to freeze the small business multiplier (paid by properties with RVs under £51,000) for 2025/26. Together with SBRR, this has protected over a million ratepayers from a 1.6 per cent inflationary bill Increase.
In the Transforming Business Rates: Interim Report, published on 11 September, the Government committed to exploring enhancing SBRR to support business growth and investment.
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