Commentary by Andrea Barnes, Head of Business Rates at Form Property
The UK Supporting Small Business (SSB) caps business rate increases at a maximum of £600 per year for firms losing eligibility for Small Business Rate Relief or Rural Rate Relief following the 2023 revaluation. It is automatically applied by local councils to eligible properties. For the 2026/27 tax year, the cap is set to change to a maximum increase of £800 or specific percentage caps.
The Supporting Small Business scheme may limit the immediate shock of rising business rates, but it does nothing to address the underlying problem. For hospitality and retail, it simply prolongs the agony. Many pubs, restaurants and independent retailers are already on life support after years of absorbing higher costs, the sharp reduction in retail and hospitality relief, and a system that continues to penalize businesses for occupying physical space.
From April 2026, the picture becomes even bleaker. Fixed minimum multipliers, rising rateable values at revaluation and the loss of meaningful relief will push rates bills up by an average of £8,000–£10,000 a year for a typical independent pub or restaurant. In some cases, the increases will be even higher – enough to wipe out margins entirely. The SSB cap may smooth the first year’s increase, but it merely delays the point at which those businesses are forced to confront an unaffordable bill.
Flashing Warning Signs
There was real optimism when the Government committed to reforming the business rates system and levelling the playing field between bricks-and-mortar operators and online giants. High street businesses have long carried a disproportionate burden despite often generating far lower turnovers. While the introduction of multiple new multipliers was presented as progress, for retail, hospitality and leisure it risks becoming another hammer blow.
The warning signs are already flashing. Industry modelling suggests closures could accelerate rapidly once the new measures take effect, with hospitality venues disappearing at an alarming rate. Without swift and targeted intervention – including halting further increases and meaningfully reducing rates for the most vulnerable sectors – viable businesses will be priced off the high street.
The Supporting Small Business scheme buys a little time, but time alone will not save these businesses. If the Government fails to act, the UK will pay the price in shuttered pubs, empty restaurants and town centers stripped of the very businesses that give them life. Unless the Government tackles this headache before next year, hundreds of businesses in the RHL sector will start closing their doors.
