Delayed budget deepens uncertainty as small firms await business rates clarity

The government’s delayed autumn budget has left many small businesses across the UK uncertain about what lies ahead for business rates. With the 2026 revaluation now less than five months away, firms are still waiting for answers on thresholds, reliefs and the effect of rising property values.

As a business rates advisor, I see growing concern among clients. Many have worked hard to rebuild after years of disruption, only to face another possible increase in fixed costs. But while uncertainty is real, it does not have to mean crisis and with the right guidance and preparation, businesses can plan ahead and protect themselves.

Rates are often a business’s second largest outgoing after rent. Even modest increases can have a serious impact on cash flow, particularly for independent shops, cafés and service firms that have only just stabilised. The key is for businesses to understand what is changing early, in order to plan and take control.

In January 2025, Labour MP James Murray pointed out that over a third of business ratepayers, around 700,000 firms, currently pay no rates at all. A further 60,000 benefit from partial small business rate relief (SBRR) between £12,000 and £15,000.

The next revaluation will reset rateable values (RVs) based on 2024 rental levels, and in many areas rents have increased sharply.

A business with an RV of £11,500 today could see that rise to £16,500 after revaluation. That change could remove their SBRR completely and add up to £9,000 a year to their bills by 2026. It is a big jump for a small business, but with the right advice it can be managed.

Under the Non-Domestic Rating Act 2023, multipliers usually rise with inflation unless the government decides to limit the increase. The most recent figures for 2025/26 were:

• small business multiplier: 49.9p
• standard multiplier: 55.5p

With September 2025 CPI inflation at 3.8 per cent, these could increase to around 51.8p and 57.6p. However, the revaluation may allow the Treasury to reduce multipliers to offset higher RVs, depending on the policy set out in the budget.

The challenge is balance. If the government limits multiplier increases but rents rise sharply, some small businesses could still face steep bills. We need transparency so firms can plan with confidence. Whatever the outcome, there are ways to prepare and manage the impact.

The 2026 revaluation introduces a five-band multiplier structure, replacing the current two-tier model. The new system will apply as follows:

1. small business, retail, hospitality and leisure (RHL), RV under £51,000
2. small business, non-RHL, RV under £51,000
3. standard RHL, RV £51,000 to £499,999
4. standard non-RHL, RV £51,000 to £499,999
5. large property multiplier, RV £500,000 or more

This reform is designed to support smaller firms and high street operators through lower RHL multipliers and targeted reliefs. Two legal safeguards have also been introduced:

• the large property multiplier cannot exceed the standard multiplier by more than 10p
• RHL multipliers cannot be more than 20p lower than the small business rate

If multipliers are adjusted carefully, many smaller firms could see only modest changes. At Rerate, we are already helping clients model different outcomes so they can plan with confidence.

To soften the effect of revaluation, the government plans a transitional relief scheme to limit how much a business’s rates bill can rise each year.

Expected parameters include:

• caps starting around £600 a year, increasing gradually to £1,800
• eligibility for the supporting small business (SSB) scheme for firms losing SBRR because of higher RVs

Transitional relief will help, but it is not a long-term fix and that’s why it is so important to seek advice early. Checking your valuation and claiming all available reliefs can make a real difference.

I encourage small firms to take a proactive approach well before April 2026. There are three key steps to prepare:

1. Check your draft rateable value as soon as it is published. Early reviews allow time to correct errors or prepare an appeal.
2. Engage with your local authority. Councils can confirm eligibility for reliefs or exemptions and help identify potential changes in RV.
3. Plan ahead financially. Even with transitional protection, some bills will rise. Building this into budgets now avoids cash flow problems later.

The best defence is preparation and with the right advice you can turn uncertainty into strategy. You do not have to face it alone.

The delay in setting out rates policy has left thousands of firms uncertain at a critical time. The next budget must confirm multipliers, thresholds and transitional arrangements early enough for businesses to plan properly.

Small businesses are resilient and central to every community. They deserve clarity and support to navigate the changes ahead. My message is simple: start preparing now, ask questions and get advice. With the right guidance, most businesses can manage the transition successfully.