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Small businesses planning to expand their premises could soon find the process easier, following new government commitments to make business rates fairer. An interim report from the Treasury states that the Chancellor will examine options to address the “cliff edges” in the system – the sudden increases in rates that often discourage investment.
At present, when a small business opens a second property, it immediately loses all entitlement to Small Business Rates Relief (SBRR). The government has now confirmed that it will review how SBRR can better support business growth.
Permanent tax cuts for retail, hospitality, and leisure
The report also confirms that from April 2026, permanently lower tax rates will be introduced for shops, pubs, restaurants, and other retail, hospitality, and leisure businesses with a rateable value below £500,000.
Possible changes to the way business rates are calculated
Business groups have long argued for reforms to the way business rates are assessed. They welcomed the report’s confirmation that the government will consider moving away from the current “slab” model (where the entire property is taxed at the highest rate) to a “slice” model (where tax increases gradually with value).
What comes next
This remains an interim report, with a full update expected at the Autumn Budget on 26 November 2025.
If you are considering expanding into additional premises, business rates are only one of several important factors. If you would like tailored advice on formulating or reviewing your expansion plans, please do get in touch — we are always happy to support you.
