Chancellor commits to supporting small businesses

The Treasury has published a report revealing the Chancellor’s plan to fix sudden jumps in business rates, known as ‘cliff-edges’, which can discourage small business investment and growth. 

Currently, when a business invests in a second premises, it loses access to all Small Business Rates Relief (SBRR), preventing it from expanding. This means that it would have to pay thousands of pounds more for opening a small outlet in the next village.

The report confirms that the government will review how SBRR can support business expansion, potentially lifting growth and living standards. It comes as the chancellor, Rachel Reeves, sets out her intentions to go further on legislation to cut red tape and promote deregulation.

'Rebalance the system'

“Tax reforms such as tackling cliff-edges in business rates and making reliefs fairer are vital to driving growth," says Reeves. "We want to help small businesses expand to new premises and build an economy that works for and rewards working people.

“As announced, from April 2026, there will be permanently lower tax rates for retail, hospitality and leisure properties, including shops, pubs and restaurants. Full details will be announced at the budget on 26 November 2025.”

Kate Nicholls, chair of UKHospitality, comments: “For too long, the broken business rates system has unfairly punished hospitality businesses and I’m pleased that the government is taking action to reform it. These measures to remove punitive cliff-edges and barriers to investment are positive and will help to rebalance the system, as will the government’s commitment to lower business rates bills for hospitality businesses.”

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