Retailers across Manchester and Liverpool watching for Budget signals on 28 October may want to pay attention to this particular speculation: Chancellor John Healey is reportedly weighing a rise in the small business rates relief (SBRR) threshold from £12,000 to £17,096 – broadly what the frozen threshold would be worth today if it had simply kept pace with inflation since 2017. A new tapered relief tier for properties with a rateable value up to £20,000 is also reportedly under consideration, alongside the threshold rise itself.
If confirmed, the change would take thousands of small shops, cafes and independent retailers out of business rates entirely. It follows a run of workshops Healey has reportedly held with business groups over the past fortnight specifically on reviving the high street – after Prime Minister Andy Burnham described struggling high streets as “markers of decline” he wants to turn into a “symbol of Britain’s renaissance.”
A wider high street discount, not just pubs
The threshold review isn’t the only high street measure in play. The i has reported that Healey is also looking at extending the 20% business rates cut already confirmed for pubs, clubs and live music venues to other high street staples – cafes and hairdressers were specifically named. Taken together with the SBRR threshold review, it’s looking like a Budget that’s shaping up to treat the high street as a package rather than addressing pubs and small shops in isolation, though nothing here is concrete until 28 October.
A lower rate, but not necessarily a lower bill
The frustrating part for many retailers is that this year’s changes have already made the system harder to predict, not easier. From April 2026, the temporary retail, hospitality and leisure (RHL) discount scheme was replaced with permanently lower multipliers – 38.2p for properties with a rateable value under £51,000, and 43p for those between £51,000 and £499,999, confirmed by the House of Commons Library. On paper, that looks like good news. In practice, confusingly, it was announced at the same time as the 2026 nationwide revaluation of commercial property, which pushed some rateable values up so sharply that bills for some ratepayers rose by as much as 80%, per gov.uk’s own guidance on the transitional relief scheme introduced to soften the blow.
That transitional relief currently caps bill increases for smaller firms at 5% this year, rising to 10% next year and 25% in 2028–29, plus inflation. A further Budget option reportedly on the table is lengthening or increasing that cap – worth watching for any retailer still working through a steep post-revaluation increase.
What it could mean locally
Liverpool’s own rating list gives a sense of how many businesses sit close to the current threshold. Of Liverpool’s 24,959 rated business properties, 1,302 currently fall in the £12,000–£15,000 band and receive only tapered relief – every one of those would move to full 100% relief if the threshold rises to £17,096, alongside an as-yet-unquantified share of the further 4,999 properties sitting in the £15,000–£51,000 band. Manchester doesn’t have an equivalent published breakdown by rateable value band, but with over 27,000 rated commercial properties on its own list – a larger pool than Liverpool’s – the number of businesses in scope for a similar uplift is, proportionately, likely to be at least as large.
A sharper story for pubs and hospitality
The threshold question impacts hospitality slightly differently. The British Beer and Pub Association estimates that raising the relief threshold to £18,000 – a marginally higher figure than the £17,096 figure under discussion – would pull 5,000 pubs out of business rates altogether, a meaningful number set against CAMRA’s figure of more than four pub closures a day nationally. UKHospitality has confirmed the trade body is “working with the government to make sure that restaurants, cafes and hotels receive comparable support on business rate changes at the Budget” – useful context now that cafes are reportedly being considered for the same discount as pubs.
On the small business side specifically, the Federation of Small Businesses, has called for “a proper, sizeable increase to small business rates relief,” describing taking large numbers of small firms out of what he called a “dated tax” as “an essential element of a pro-small business budget.”
Nothing is confirmed
As ever with pre-Budget reporting, none of this is settled. A Treasury spokesperson’s response was the standard line that “decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals” – a reminder not to treat any of these figures as final until 28 October.
What retailers should do now
For retail and eCommerce businesses in the North West, it’s worth checking where your rateable value currently sits relative to £12,000, £17,096 and £20,000, since a change at any of those points could materially affect next year’s bill – and, if you’re also managing a pub, café or hospitality site, to keep an eye on whether the threshold that could land matches the retail figure or the higher one the BBPA is pushing for. Businesses still absorbing a steep post-revaluation increase should also watch closely for any change to the transitional relief caps, since that could matter as much as the headline threshold itself.
Whichever way the Budget lands, the practical task is the same: checking your rateable value against whatever thresholds are confirmed, working out what any change means for cashflow over the next two years, and making sure transitional relief is actually being applied where it should be. Can we help you with any of this? Get in touch with our Retail & eCommerce team if so, or reach out to Damien Loughran below.