Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of small business rate relief on the viability of small hospitality businesses.

The Government is creating a fairer business rates system that protects the high street, supports investment, and is fit for the 21st century.

As set out at Autumn Budget 2024, the Government will introduce permanently lower tax rates for retail, hospitality and leisure (RHL) properties with ratable values (RVs) below £500,000 from 2026-27.

Over a third of properties (more than 700,000) already pay no business rates as they receive 100 per cent Small Business Rate Relief (SBRR), with an additional c.60,000 benefiting from reduced bills as this relief tapers.

The Transforming Business Rates: Interim Report, published on 11 September, brings together extensive feedback from a broad range of stakeholders and outlines the Government’s next steps to deliver a fairer business rates system, that supports investment and is fit for the 21st century. This includes exploring a number of reforms to incentivise investment and improve the operation of the business rates system, including how SBRR could be enhanced to more effectively support investment and expansion among small businesses.

The Government will provide a further update at the Budget. Transforming the business rates system is a multi-year process. The Government will consider reforms beyond Budget 2025, and any reforms taken forward will be phased over the course of the Parliament.