Business Rates Threshold Could Rise to £18,000: What's Reported
Updated: 7 days ago
The Chancellor's Autumn Budget lands on 28 October, and as always, the fortnight before is full of leaks, briefings and reports from “well-placed sources”. Most of it is worth treating with a raised eyebrow until the actual Budget book is published. But one report doing the rounds this week is worth a closer look if you run a shop, café, pub or other premises-based business in Bury, or anywhere else on the UK high street: a possible near-trebling of the threshold at which many local businesses stop paying business rates.
What's being reported
According to reports in the Sunday Times, the government is considering raising the rateable value threshold for small business rates relief from £12,000 to £18,000. If that goes ahead, a meaningful number of local shops, cafés and pubs that currently pay rates would stop paying them altogether, or see their bills fall.
The same reports suggest the change could be funded, at least in part, by moves elsewhere. The Times has reported that online marketplaces such as Amazon and eBay could be required to collect VAT at source on behalf of sellers with turnover above £90,000, which the Treasury is said to see as a way of raising up to £1 billion. Separately, the Telegraph has reported that the Chancellor is looking at how business owners pass a company to their children using “redeemable shares”, with a possible move from capital gains tax to income tax treatment on that kind of succession planning.
None of this is confirmed, and Budget leaks have a habit of changing, sometimes significantly, between the newspaper briefing and the Chancellor's actual despatch box speech. We'd treat all of it as worth watching rather than something to plan around just yet.
Why the business rates threshold matters
Business rates are one of the less visible but more painful fixed costs for a premises-based business, because they're charged whether trade that month was good or bad. Under the current rules, properties with a rateable value under £12,000 pay no business rates at all, thanks to Small Business Rate Relief, with relief tapering away for properties valued between £12,001 and £15,000.
Raising the cut-off to £18,000, as reported, would be a genuinely significant change for local shops, cafés and other businesses occupying modest premises, including plenty of units across Bury and the wider Greater Manchester area that sit in exactly that rateable value band.
Who this could affect
Retailers, cafés and pubs occupying smaller premises, where the rateable value sits between £12,000 and £18,000
Businesses currently just above the Small Business Rate Relief taper, who could move into relief entirely
Online sellers trading through marketplaces, if the VAT-at-source proposal for platforms goes ahead
Company owners with succession plans built around share buy-backs, if the tax treatment on “redeemable shares” changes
What to do before 28 October
Our advice, as with every Budget, is not to make decisions based on newspaper leaks. A few sensible, low-risk things are worth doing in the meantime:
Check your current rateable value and rates bill, so you know straight away whether a change would affect you
Hold off on any succession or share buy-back planning that assumes today's capital gains tax treatment will continue, until the Budget is actually published
If you sell through an online marketplace, keep an eye on your turnover against the reported £90,000 threshold
Keeping a close eye on your overheads in the meantime makes it much easier to see, once the detail lands, whether and by how much any change actually helps your bottom line
We'll cover what's actually confirmed as soon as the Budget documents are published on 28 October, with a clear look at what it means for Bury businesses specifically, numbers included.
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Talk it through with us
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