Will my shop, pub or gym stop paying business rates? The £18,000 threshold explained

Business rates were the one Budget measure aimed squarely at the high street. The Chancellor, John Healey, told the Commons on 28 October 2026 that he is raising the Small Business Rate Relief threshold for retail, hospitality and leisure businesses from £12,000 to £18,000, taking 70,000 more businesses out of paying business rates altogether, so that half of shops, restaurants and gyms pay none at all. The detail sits in a Business Rates Information Letter the Ministry of Housing, Communities and Local Government sent to councils the same day. This guide explains who qualifies, when it starts and what else changed. Smart Funding Solutions is a broker, not a lender. We compare options across the whole market and arrange business finance from £10,000 to £20 million.

01Who gets the new £18,000 threshold?

Only properties that count as retail, hospitality or leisure, and only in England. The information letter says the rateable value thresholds within Small Business Rate Relief rise from £12,000 to £18,000 and from £15,000 to £21,000 for qualifying retail, hospitality or leisure properties until 31 March 2029. Eligible properties get 100% relief up to £18,000 rateable value, tapering evenly to 0% at £21,000. The thresholds will be reviewed at the 2029 revaluation.

Everyone else stays on today’s rules. GOV.UK’s guidance says you get 100% relief on a single property with a rateable value of £12,000 or less, tapering to nothing at £15,000. So an office, a workshop, a warehouse or a surgery keeps the £12,000 limit. The letter also excludes vape shops from Small Business Rate Relief and keeps adult gaming centres on the existing £12,000 and £15,000 thresholds. Businesses with more than one property get a single new rateable value limit of up to £29,999 for their second and further properties. Scotland, Wales and Northern Ireland run their own schemes, and nothing here changes them.

02When does the change start?

1 April 2027, the start of the 2027-28 rates year. That means a full year and five months of paying on the current thresholds first, so keep paying your existing bill. The letter sets the multipliers for 2027-28 as well. The small business retail, hospitality and leisure multiplier is 39.7p in the pound, the standard retail, hospitality and leisure multiplier 44.7p, the small business multiplier 44.7p, the standard multiplier 49.7p and the high-value multiplier 52.5p. Check your rateable value on the find a business rates valuation service. If it sits between £12,000 and £21,000, you are the business this measure was written for.

03What else changed for pubs and high street businesses?

• Pubs, social clubs and live music venues. An extra 20% relief in 2027-28 and 2028-29, taking their total relief to 35%, according to the information letter.
• A two-year bill freeze. Retail, hospitality, leisure, pub and live music venue bills are frozen in real terms until 31 March 2029, with eligible bills capped by inflation in each of the two years.
• Supporting Small Business relief. The 2026 scheme is extended for a further year for those who received the 2023 relief, which cushions businesses that lost relief at the last revaluation.
• Transitional relief supplement. The 1p supplement is extended for two more years to help fund the package, which is why the standard multiplier does not fall.
• A business rates anti-avoidance rule. The government will introduce a general anti-avoidance rule for business rates at the earliest opportunity.

Our hospitality news report set out what the trade asked for before the Budget. The relief lands against a 3.9% rise in the National Living Wage from April 2027, so it is a help rather than a cure. Pub owners can read how buying and funding a pub works, and our bar and pub loans and restaurant loans pages cover the lenders active in licensed trade.

04How much could a shop or gym save?

Take a shop with a rateable value of £17,000, the only property the business uses. Today it is above the £15,000 ceiling, so it gets no Small Business Rate Relief and pays the small business multiplier. On the 2027-28 small business retail, hospitality and leisure multiplier of 39.7p, the bill before any relief would be about £6,750. From 1 April 2027 the same shop is under £18,000, so its bill falls to nothing. A gym at £20,000 rateable value sits in the taper between £18,000 and £21,000, so it would get partial relief rather than a full exemption. Your council applies the relief, but it is worth checking your rateable value now and applying if you are not already registered for it. The retail business loans and gym and fitness centre loans pages show what lenders in those sectors look for.

05What does it mean for your funding?

Lenders test affordability on your actual overheads, so a rates bill that disappears from April 2027 improves the figure every lender looks at first, free cash flow after fixed costs. Put the saving into your cash flow forecast from April 2027, not before, and be ready to show the rateable value that supports it. The relief does not pay for a refurbishment or Christmas stock this winter, so the gap between now and April is where working capital loans, asset finance for fit-out and equipment, or a revolving credit facility come in. We also keep a Budget checklist for business owners covering the tax changes.

If you run a shop, pub, restaurant, salon or gym and want to know what lenders would offer now, get your Instant Quotes to see your lender matches instantly, with no credit check, then a broker searches the wider market for you. Lenders make every decision, and all finance is subject to status.