Chancellor Rachel Reeves has reiterated her intentions to support small businesses and encourage them to explore growth opportunities.
The HM Treasury has released a report highlighting what the Chancellor is planning to do ahead of the Autumn Budget including reviewing the Small Business Rates Relief (SBRR) and analysing “cliff-edges” tax increases.
This is a great opportunity for small business owners to analyse the overall financial health of their business and discuss their plans ahead of potential reforms that should encourage investment and growth.
The Government is striving to ensure business rates are fair and small business owners have the ability to invest and expand their business services to generate economic growth.
Under the current SBRR regulations, when purchasing a second property for their business, small business owners lose all access to the SBRR.
As well as losing access to SBRR, small business owners face what is known as “cliff-edges,” which are sudden tax increases if they have chosen to expand.
This has left many business owners feeling unsure about going ahead with their expansion plans because rather than being encouraged to help the economy, they are being punished for it.
However, with the Chancellor now analysing the current SBRR regulations in place, there are signs that she will look to make changes that incentivise business owners.
Speaking about the release of the HM Treasury’s report, Chancellor Rachel Reeves spoke about her commitment to small businesses: “Our economy isn’t broken, but it does feel stuck.
“That’s why growth is our number one mission. We want to see thriving high streets and small businesses investing in their future, not held back by outdated rules or strangled by red tape.
“Tax reforms such as tackling cliff-edges in business rates and making reliefs fairer are vital to driving growth.
“We want to help small businesses expand to new premises and building an economy that works for, and rewards working people.”
In 2024, the Chancellor announced that from April 2026, retail, hospitality and leisure properties, a list which includes shops, pubs and restaurants, would face permanently lower tax rates.
She wants to build on that announcement and drive economic growth forward but will be wary of her own tight fiscal rules and other challenges including balancing the Government’s books.
The Government has already demonstrated its support for small businesses by giving 250,000 retail, hospitality and leisure businesses 40 per cent off their business rates and freezing the small business multiplier to protect against inflation.
The Chancellor is keen on kickstarting the economy and analysing the SBRR and tackling “cliff-edge” business rates will certainly give business owners the incentive they need to invest, but all will depend on what she changes.
For business owners, it’s the ideal time to analyse your business’s finances ahead of the Autumn Budget because she wants to make changes that encourage investment.
Understanding your own financial position, what funds are available and discussing your expansion plans is the perfect preparation and finance experts can help you do this.
They will help assess your current and future plans as well as help you build a clear picture of your business’s finances.
Understand your business’s finances, contact us for expert financial advice.
