Federation of Small Businesses urges £25,000 rates relief threshold before Budget

Reports on 13 October 2026 said the Federation of Small Businesses (FSB) had called on the UK government to raise the Small Business Rate Relief threshold in England to £25,000 before the Autumn Budget on 28 October. The Southern Gazette and Brit Brief both reported the call that day, citing FSB data on hiring and investment.

The request is a repeat rather than a new proposal. A Minutehack report dated 29 September 2026 described the same £25,000 request. As of 14 October 2026, the sources reviewed contained no government response to the FSB’s call.

How Small Business Rate Relief works in England now

Small Business Rate Relief applies to businesses with a property whose rateable value is below £15,000 and that use only one property, and to some businesses that use more than one. GOV.UK says a property with a rateable value of £12,000 or less pays no business rates under the relief if it is the business’s only property. Between £12,001 and £15,000 the relief tapers from 100% to 0%, with examples of 50% at £13,500 and 33% at £14,000.

A business that uses a second property can keep the relief on its main property for a limited time. The period is 12 months if the second property was acquired before 27 November 2025, and 36 months if it was acquired on or after that date. After that, the relief continues only if no other property has a rateable value above £2,899 and the total rateable value is under £20,000, or £28,000 in London.

Relief cannot be combined with charitable rate relief. Owners contact their local council, which also decides which relief applies, and must report changes such as a property becoming empty.

Current threshold in England
According to GOV.UK, a property with a rateable value of £12,000 or less pays no business rates under Small Business Rate Relief if it is the business’s only property. Relief tapers to 0% at £15,000.

What a £25,000 threshold would change for rates bills

The FSB’s request, as reported, is to lift the 100% relief threshold in England from £12,000 to £25,000 of rateable value. The sources read do not say how the taper above the threshold would change, so the effect on bills at the upper end of the range is not described.

The FSB estimates that the change would take at least 250,000 more small businesses out of paying business rates, according to the Southern Gazette and Brit Brief. Minutehack gives the figure as 250,000 businesses and attributes it to the FSB. None of the reports read sets out how it was calculated.

For an owner with a rateable value between £12,000 and £25,000, the bill would change only if the government adopts the request. No change has been announced in the sources read.

Hiring and investment: what the FSB data reports

The FSB says 28% of small employers would hire more staff if the relief were expanded. Another 11% of sole traders say they would consider taking on a first employee if the relief saved them money, and 26% of small employers would raise pay or benefits.

Asked how important the relief is, 36% of small businesses said it was essential or important. The share was 49% for retail and 47% for accommodation and food.

Neither report gives the sample size, fieldwork dates or survey method. The figures are FSB data as reported, and the underlying data was not among the sources read.

The FSB says the change would take at least 250,000 more small businesses out of paying business rates.

Other FSB requests and what to check before 28 October

The FSB’s wider package asks for the Employment Allowance to rise substantially and be indexed to the National Living Wage, so it covers at least the employer National Insurance costs of four full-time workers on that wage. It also asks for Business Asset Disposal Relief to return to 14% from 18%, a VAT registration threshold of £100,000 rather than £90,000, a Statutory Sick Pay rebate for small employers, and the removal of 75% of Renewables Obligation costs from small business energy bills.

Tina McKenzie, FSB National Chair, told the Southern Gazette that the Budget will be an early test for the new government, and that ministers’ stated aim of growth will not happen by squeezing margins or making employment more expensive.

The Budget date and Chancellor come from two other sources. Evelyn, dated 25 August 2026, and Minutehack, dated 29 September 2026, both give 28 October and name John Healey as Chancellor. The reports read for this story do not say whether the Budget will include the threshold change, so the outcome of the FSB’s request is not yet known. Readers should watch whether the threshold appears in the Budget documents and whether the government responds to the FSB.

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