Budget increases Business Rates relief threshold

Chancellor John Healey used today’s Budget to announce plans to raise the threshold for Business Rates relief for hospitality.

He also confirmed reports that the increase to the minimum wage would be slowed to young people, with the goal of encouraging more job opportunities.

Healey said: “We cut 20 per cent off business rates for pubs, clubs and music venues from April 2027; now I’m increasing the threshold for rate relief from £12,000 to £18,000 for hospitality - meaning 17,000 small businesses are not just getting rates cuts, but removing them.

“I want these small businesses to invest, recruit and expand, so I’m taking action to support our high streets.”

The Chancellor also announced a two-year real-terms freeze in business rates bills for all retail, hospitality and leisure properties. 

The rate paid to workers aged 21 and over, currently £12.71 an hour, and the rate payable to workers aged ‌18 to 20, now £10.85, will both rise by 3.9%. The increases means the National Living Wage will grow to £13.21 an hour and the 18 to 20 National Minimum Wage to £11.27.

Kate Nicholls, chair, UKHospitality, said: “Stepping off the accelerator on the national minimum wage for young people is welcome. We warned the government that moving too quickly on equalisation [of the minimum wage for young people and older workers] would damage job opportunities at entry level.”

Michael Kill , CEO, Night Time Industries Association, said: “There is a clear attempt to balance immediate pressures with a longer-term strategy for growth, investment and structural reform, which we recognise.

"While the government's longer-term ambitions are encouraging, they must be matched by a jointly developed short-term strategy to address the immediate challenges facing operators. Our sector needs stability, the right financial conditions and a genuine opportunity to recover, ensuring viable businesses are not lost while longer-term reforms take effect. This Budget may provide some breathing space, but the real test will be whether it prevents further business losses and creates the conditions for recovery. One Budget cannot undo years of damage. What we need now is immediate action alongside long-term reform, giving businesses the confidence and financial capacity to survive, invest and grow again.”