Autumn Budget 2026: What Does It Mean for UK Small Businesses?

Thousands of small businesses have something to celebrate after Chancellor John Healey’s first Autumn Budget, with a big change to business rates set to take 70,000 more shops, cafés and venues out of paying them altogether.

The Small Business Rate Relief threshold for retail, hospitality and leisure businesses in England will rise from a rateable value of £12,000 to £18,000, according to the Budget announcement. It follows figures from the British Retail Consortium, the trade body that represents UK retailers, showing that shop price inflation rose to 2.1% in October, up from 1.4% in September.

Ahead of the Budget, British Retail Consortium CEO Helen Dickinson said: “Retailers cannot endlessly swallow higher business rates, employment costs, energy bills, and packaging taxes. Without a change of course, October’s jump in inflation is only the beginning.”

She added: “Our recipe for the Chancellor is simple. Slash employment costs. Cancel the 3.5% business rates increase. Remove shops from the high-value surtax. Otherwise, households will end up paying the price.”

A tough year for small businesses

The Budget arrived after a challenging year for many businesses. Data from BTG shows financial distress reached a 20-year high, with more than 738,000 British businesses affected, while Novuna Business Finance found that 86% of small businesses were worried about how the Budget might affect their finances and growth plans.

Jacyn Heavens, CEO of Epos Now, said: “Every day we see what running a small business in the UK really looks like right now. It’s the café owner opening up at 6am and doing the books at midnight. It’s the shopkeeper skipping their own wage so they can pay their staff on time.

“These aren’t faceless businesses. They’re the people who know their customers by name, sponsor the local football team and give young people their first job. And right now, many of them are exhausted. Wages, National Insurance, energy and business rates have all gone up, and there’s simply nowhere left to absorb it.”

A step in the right direction

Before the Budget, Heavens called for more support. “A real rise in the Small Business Rates Relief threshold and a cut to hospitality VAT would give business owners the breathing space to keep their doors open, keep their teams together and plan for the future with some confidence,” he said. “Our high streets don’t survive on their own. They survive because of these people, and it’s time they were backed by the government.”

The new threshold delivers on the first of those asks. While a hospitality VAT cut wasn’t among the headline announcements, the rates relief means many small businesses will have a little more breathing room heading into 2027, and the chance to start planning for growth again.