In July, the government announced an extra 20% business rates relief for pubs, social clubs and many live music venues. This is in addition to the support introduced earlier in 2026, bringing the total relief to 35%. The support will be provided in 2027-28 and 2028-29. 

It has now been announced that the annual liability threshold for small business rates relief (SBRR) will be increased from £12,000 to £18,000 for retail, hospitality and leisure (RHL) businesses on 1 April 2027. The threshold for tapered relief will also increase from £15,000 to £21,000. The government estimates that an additional 3,500 pubs, 3,900 restaurants, 2,200 cafes and 1,700 hairdressers and beauty salons will pay no business rates as a result of these measures.

There will also be a real-terms freeze of business rates bills for qualifying RHL properties in England in 2027–28 and 2028–29 and transitional support will be extended for a further year, protecting 37,000 small and independent ratepayers. 

The government believes that half of all RHL properties in England will pay no business rates at all and 110,000 properties will see their rates falling next year because of these measures.

The budget also confirmed that access to SBRR will be removed for vape shops and that eligibility for the RHL multipliers will be removed from vape shops and adult gaming centres.  

Further information:

• 8/2026: Details of the Budget package and the multipliers for 2027/2028 - GOV.UK

Fiscal devolution

The government has also announced a roadmap for fiscal devolution. As part of this process, the government will be allocating mayoral strategic authorities a 20% share of locally retained business rates from 2027 and, in recognition of the importance of retained business rates to local authority funding, local authorities will retain at least 70% of business rates revenues by the end of the decade.

Plans are also in place for mayors to retain 20% of income tax raised locally from 2028–29 and all strategic authorities will have the power to introduce an Overnight Visitor Levy.

Alongside these powers, the government will establish Good Growth Funds to support mayors and local leaders across England to ensure there is investment and good growth everywhere. Devolved governments will receive equivalent funding via the Barnett formula.