Business Rate Cut For High Street From 2026

Last month the government outlined plans to permanently reduce business rates for retail, hospitality, and leisure properties starting in 2026. This initiative, part of a broader effort to support high street businesses, aims to lower the tax burden on these sectors, helping them thrive amid economic challenges.

“Legislation has today been introduced to allow government, for the first time, to permanently cut business rates for retail, hospitality and leisure properties.” Gov.uk, Nov 13th 2024

To fund these reductions, high-value properties, including large warehouses used by online retailers, will face increased rates. This approach seeks to balance the system and ensure fairness across different types of commercial properties.

In the short term, the government is providing relief for approximately 250,000 retail, hospitality, and leisure properties. Businesses in these sectors will benefit from a 40% reduction in business rates, up to a cap of £110,000 per business. This temporary measure is designed to ease the transition to the new rates and provide immediate support to businesses.

Additionally, the Employment Allowance will increase from £5,000 to £10,500 starting in April 2025. This change will exempt 865,000 employers from paying employer National Insurance, further easing the financial pressures on small and medium-sized businesses.

These reforms are part of a long-term strategy to revitalise high streets, support local businesses, and create a more equitable system for all.

Source: Gov.uk