Following a Government commitment to make the business rates system fairer, small businesses could soon find it easier to expand premises.
An interim report published by HM Treasury today (11 September) outlines proposals to reform business rates in line with a manifesto pledge to incentivise investment. The Chancellor confirmed she is considering changes to eliminate sudden jumps in rates, known as “cliff edges”, which can discourage small firms from growing.
Opening a second property results in the complete loss of Small Business Rates Relief (SBRR). For many firms, this acts as a barrier to expansion. For example, a local bakery wishing to open a second shop in a nearby village would face thousands of pounds in additional costs due to the withdrawal of SBRR.
The report highlights that the Government will review how relief can better support small business growth, ensuring the system does not unfairly penalise firms looking to scale up. Ministers believe addressing this could help lift investment, growth, and living standards for those employed in these businesses.
The review of business rates comes alongside the Chancellor’s wider agenda to cut red tape and pursue deregulation to drive growth. In a letter to Cabinet colleagues this week, she stressed the need to reduce inflation and the cost of living while keeping firm control of public spending through strict fiscal rules. Reforming business rates, she argued, forms part of building an economy that rewards working people.
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