Thousands of high-street shops, cafes, pubs and hairdressers will no longer have to pay business rates under plans expected in the Budget on 28 October, according to reports. Chancellor John Healey is expected to raise the threshold at which small companies start paying business rates from £12,000 to £18,000.

Who benefits

An analysis by tax firm Ryan, cited by The Times, estimates about 75,000 properties would be lifted out of paying rates, including 39,000 shops, 2,600 pubs, 2,500 restaurants, 2,000 hairdressers and beauty salons, 1,600 cafes and 1,600 village halls and scout huts. The change would apply in England, as business rates are devolved, and would particularly help smaller independent firms in retail, hospitality and leisure for whom rates are a fixed bill whatever the takings.

Prime Minister Andy Burnham promised "breathing room" for pubs and small businesses over the summer, and the move would honour that pledge.

How it is paid for

The measure is estimated to cost the Treasury about £460 million a year. It is expected to be funded by tax rises on online retail giants, including a reported £1 billion crackdown making online marketplaces such as Amazon and eBay responsible for collecting VAT owed by third-party sellers using their platforms, targeting overseas sellers who fail to pay and undercut UK retailers.

Separately, pubs, social clubs and live music venues in England are already confirmed to receive a 20 percent cut to their business rates bills from April 2027, building on 15 percent relief for 2026-27. Healey has said he wants a Budget that gives Britain "a bit of breathing space" while keeping the government's fiscal plans credible. The full detail, including how the threshold change interacts with existing hospitality support, is due on Budget day.

Sources: The Times, Caterer Licensee, The British Banner