Pubs, Cafés and High Street Businesses Set For Business Rates Relief In Budget

Thousands of pubs, cafés and independent high street businesses are expected to be lifted out of business rates altogether when the Chancellor delivers the Budget on 28 October, according to reports.

Under the plans, the threshold at which businesses begin paying rates would rise from £12,000 to £18,000. The change is expected to remove roughly 75,000 smaller properties from the system. It will apply first in England.

The move follows a commitment made by the Prime Minister earlier this year to give pubs and small firms “breathing room”. Andy Burnham made the pledge during the Makerfield by-election campaign.

For the pub trade, which has long argued that rates are among the heaviest fixed costs facing smaller operators, the change will be closely watched. The detail of how the relief interacts with existing hospitality support is yet to be confirmed.

How it will be paid for

The measure is estimated to cost the Treasury around £460 million a year. It is expected to be funded by a tightening of tax rules on large online retailers.

A reported £1 billion crackdown would make online marketplaces such as Amazon and eBay responsible for collecting VAT owed by third-party sellers using their platforms. The aim is to target sellers, many of them based overseas, who fail to pay the tax and so undercut UK retailers.

Mr Burnham has also floated lifting the threshold further, to £21,000, over time.

Difficult backdrop

The announcement comes ahead of what is expected to be a testing Budget. The government has stressed the need to ease pressure on households and raise revenue, with inflation affected by the conflict in Iran.

John Healey said he wanted a Budget that gave the country “breathing space” while also reinforcing the strength of the government’s fiscal plans and the resilience of the economy.