What Do SMEs Think About The Business Rate Changes In The UK?

As of April 2026, business rates in the UK will undergo significant changes.

Beginning in 2026, several modifications will be implemented in the calculation of business rates:

Revaluation of Properties: All business properties will undergo revaluation, with the previous valuation occurring in 2021. This change is expected to lead to increased business rates, as property values have generally risen since the last evaluation. Expanded Multipliers: The number of rate multipliers will increase. Previously, two rates existed for small and large businesses. The updated list will include two lower rates for hospitality, retail, and leisure sectors, and a higher rate for larger businesses. Altered Reliefs: The reliefs available to businesses are also being adjusted.

The changes in business rates are anticipated to have a substantial impact on businesses, especially those primarily located on high streets or requiring extensive space such as warehouses. Many businesses may experience significant increases in their bills, posing challenges to their financial sustainability.

Patryk Luszcz , UK Regional Director at Profitroom Ben Westoby , Senior Consultant at Forbes Burton Niki Fuchs , Co-Founder and CEO at Office Space in Town George Holmes , Managing Director at Aurora Capital Richard Bond , Owner at Finest Retreats

Patryk Luszcz, UK Regional Director at Profitroom

"The tax increases effective from April will exacerbate the existing pressures on the hospitality industry, already facing significant financial constraints. Current tax burdens can amount to 75% of pre-tax profits, leaving minimal room for additional costs. Recent surveys indicate that these increases have led to staff reductions, with many businesses operating below necessary capacity. The cumulative pressure from rising business rates, energy costs, and wage increases could accelerate job losses and hinder long-term planning and investment."

Ben Westoby, Senior Consultant at Forbes Burton

"Restaurant owners express concerns that the increased business rates may be detrimental to their operations, as downsizing remains infeasible due to spatial requirements. The rising costs of energy and staffing exacerbate these challenges. Retail businesses, although able to operate in smaller premises, still face significant financial pressures from high-street locations and increasing competition from online outlets. These factors contribute to a precarious outlook for businesses in 2026, with many directors worried about potential insolvencies."

Niki Fuchs, Co-Founder and CEO at Office Space in Town

"The decision to raise business rates from April 1, 2026, may stifle investment and employment within urban areas. The inflexible tax policy disregards the nuances of shared workspaces, imposing disproportionate financial burdens on operators. This diminishes the agility and adaptability of flexible work environments, essential in the evolving landscape of hybrid work models. Without urgent policy reconsideration, the economic resilience of town and city centers could be severely impacted."

George Holmes, Managing Director at Aurora Capital

"The persistent increase in business rates is becoming a critical threat to high street shops and hospitality venues. While transitional relief offers temporary reprieve, it fails to address the core issue of escalating costs. Sustained rate increases could force small operators to make difficult decisions, such as reducing staff or closing entirely, which do not support local economies."

Richard Bond, Owner at Finest Retreats

"The impending business rates changes will significantly affect the tourism sector, impacting both businesses and property owners. The cumulative effect of various tax changes and increased costs poses challenges to profitability and competitiveness. This situation affects the broader economy, as local suppliers and hospitality businesses relying on tourism may also face financial difficulties. It is crucial for the government to recognize the importance of supporting these sectors to foster national economic growth."

Based on reporting by techround.co.uk.