England plans to raise the business rates relief thresholds for qualifying shops, hospitality businesses and leisure properties from April 2027, while limiting increases in eligible bills to inflation for two years. The package announced at the Budget on 28 October also increases support for pubs and most live music venues, but excludes vape shops and adult gaming centres from parts of the relief system.
The Ministry of Housing, Communities and Local Government set out the details in a letter to English billing authorities published the same day. Its technical annex says regulations and guidance will follow in the coming weeks. These are announced changes for the next financial year, not a reduction already applied to current bills.
Higher thresholds, with limits on the bill freeze
For eligible retail, hospitality and leisure properties, the rateable-value threshold for full Small Business Rate Relief would rise from £12,000 to £18,000. Relief would then taper evenly, reaching zero at £21,000 rather than the existing £15,000 upper threshold. These figures refer to rateable values, not the amount of a business's tax bill or its turnover.
The higher thresholds are planned to run until 31 March 2029, with a review at the 2029 revaluation. The government also plans a single England-wide threshold of no more than £29,999 for the aggregate rateable value of additional properties that may be disregarded when deciding relief on a main property. This replaces separate London and elsewhere thresholds in that test.
The promised real-terms freeze does not mean every eligible bill stays unchanged in pounds. Increases would be capped by Consumer Prices Index inflation during 2027/28 and 2028/29. The letter excludes increases in rateable value resulting from improvements, and losses of other reliefs such as improvement or hardship relief after 1 April 2026, from that protection.
Eligibility for the freeze would be tested on 1 April in each of the two financial years. The annex says there is no rateable-value limit for qualifying retail, hospitality and leisure properties benefiting from this cap. However, vacant properties cannot qualify in a year when they are unoccupied on that date.
Pubs, gaming centres and vape shops face different rules
The package would increase relief for pubs, social clubs and all but the largest live music venues to 35% for 2027/28 and 2028/29. That adds 20 percentage points to the existing 15% support. Live music venues with rateable values of £1 million or more would remain on 15% relief, according to the technical annex.
Vape shops would lose access to Small Business Rate Relief. Both vape shops and adult gaming centres would be excluded from the definition used for the lower retail, hospitality and leisure multipliers, with detailed definitions still to follow. Those exclusions would also flow through to eligibility for the new inflation-linked bill cap.
Adult gaming centres would not lose every form of small-business relief. The annex says eligible centres could still receive Small Business Rate Relief under the existing £12,000 and £15,000 thresholds. They would not receive the higher thresholds reserved for qualifying retail, hospitality and leisure properties. The distinction matters because the two types of business are not treated identically.
For 2027/28, the announced standard multiplier is 49.7p and the small-business multiplier is 44.7p. The retail, hospitality and leisure equivalents are 44.7p and 39.7p respectively, while the high-value multiplier is 52.5p. Separately, the 1p Transitional Relief Supplement would be extended for two years to help fund the support package.
Further rules are still to come
The government also plans to extend support for businesses moving from the 2023 Supporting Small Business scheme for another year. It intends to consult businesses and local partners this winter on a general anti-avoidance rule for business rates, rather than presenting that rule as already settled.
These England-specific property-tax measures are separate from other Budget announcements, including the planned £100 household energy payment and the consultation on HMRC access to e-invoice data. The ministry cautions that its annex is an advance technical overview and should not replace the regulations and guidance once published. Individual eligibility and implementation therefore depend on those forthcoming rules.
Contains public sector information licensed under the Open Government Licence v3.0.
