Rising Business Rates: A Growing Challenge for Small Businesses

Business rates have become an increasingly heavy financial burden for small businesses in the UK, particularly for those in their earliest, most uncertain stages. These non-residential property taxes are determined by the Valuation Office Agency based on a property’s “rateable value.” Following the agency’s latest seven-year review, many commercial spaces saw dramatic increases in rateable values last year, significantly impacting small business costs.

For many of our customers, these sudden increases in business rates couldn’t have come at a worse time. More small businesses now face the reality of paying business rates for the first time, which is delaying their investment and growth decisions. Start-ups and young companies with limited resources are now forced to navigate higher costs at a stage when every penny counts. Although the Small Business Rates Relief (SBRR) scheme was initially created to ease this burden, it only applies if a business occupies a single commercial property with a rateable value below £12,000. With rateable values climbing, many businesses that once qualified for full rates relief now exceed this threshold and must bear the full cost.

This issue underscores the need for the UK government to re-evaluate the small business rates relief threshold. Increasing the threshold would allow more small businesses to benefit from relief and give them the chance to reinvest in growth, create jobs, and strengthen local economies. For the UK’s small business community, this support is essential to navigating the challenges of operating a physical storefront or office space.

In today’s tough economic environment, rising business rates should not be an added barrier for entrepreneurs and local enterprises. Expanding the scope of small business rates relief would provide meaningful support for small businesses, ensuring they can focus on growth, innovation, and contributing to their communities. It’s time for policymakers to adjust business rates relief to reflect these economic realities and better support small business resilience and success.