Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of changes to retail, hospitality and leisure relief announced in the Budget on small businesses.

This question was answered on 15th December 2025

The amount of business rates paid on each property is based on the rateable value of the property, assessed by the Valuation Office Agency (VOA), and the multiplier values, which are set by the Government. Rateable values are re-assessed every three years. Revaluations ensure that the rateable values (i.e. the tax base) of properties remain in line with market changes, and that the tax rates adjust to reflect changes in the tax base.

At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since Covid, which has led to significant increases in rateable values for some properties. To support with bill increases, at the Budget in November 2025, the Government introduced a support package worth £4.3 billion over the next three years to protect ratepayers seeing their bills increase because of the revaluation. As a result, over half of ratepayers will see no bill increases, including 23% seeing their bills go down. This means most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest.

This support package includes capping bill increases for the smallest businesses losing some or all of their small business rates relief or rural rate relief worth over £500 million. The Government has gone further by expanding this to ratepayers losing retail, hospitality and leisure (RHL) relief to offer further support worth an additional £1.3 billion as they transition to permanently lower tax rates.

More broadly, the Government is delivering a long overdue reform to rebalance the business rates system and support the high street, as promised in the manifesto. The Government is doing this by introducing permanently lower tax rates for eligible RHL properties. These new tax rates are worth nearly £900 million per year, and will benefit over 750,000 properties. The new RHL tax rates replace the temporary RHL relief that has been winding down since Covid. Unlike RHL relief, the new rates are permanent, giving businesses certainty and stability, and there will be no cap, meaning all qualifying properties on high streets across England will benefit.