More than 2,400 shops, cafés, pubs and salons in Birmingham will stop paying business rates from 1 April 2027 under the higher relief threshold announced in yesterday’s Budget, according to analysis by BusinessRateChecker.
Chancellor John Healey raised the threshold for full small business rate relief for retail, hospitality and leisure properties from a rateable value of £12,000 to £18,000. Full relief applies where the property is the business’s only one, or where it has a small second property.
The government said in its Budget announcement that the change would take around 70,000 more retail, hospitality and leisure businesses out of business rates, and that half of all such properties in England would pay none. The increase follows reports in September that the Chancellor was considering a higher threshold.
BusinessRateChecker mapped every retail, hospitality and leisure property in England with a rateable value between £12,001 and £18,000, using the Valuation Office Agency’s 2026 rating list. It found 2,417 such properties in Birmingham, worth £10.4m a year to their occupiers.
Cornwall and North Yorkshire followed, with 1,229 and 1,217 properties respectively and about £5.3m a year each. Leeds had 1,188, Ealing 1,080, Manchester 1,074, Croydon 1,057 and Barnet 1,020, with Bristol on 967 and Waltham Forest on 964 completing the top ten.
The firm put the average saving in those ten councils at between about £4,300 and £4,600 a year, based on 2027/28 bills at a 39.7p multiplier and before transitional relief. It said median savings clustered at £4,797 and £5,955 because the Valuation Office sets values in round steps, corresponding to rateable values of £14,500 and £15,000.
Outer London boroughs see the largest share
Measured as a share of each council’s retail, hospitality and leisure properties, all ten of the highest proportions are in outer London boroughs, among councils with at least 1,000 such properties, the analysis found.
Barking and Dagenham tops that measure at 30.6 per cent, or 474 of its 1,548 properties, followed by Sutton at 30.1 per cent and Havering at 29.7 per cent. The share is 18.1 per cent in Birmingham, 8.3 per cent in North Yorkshire and 6 per cent in Cornwall.
BusinessRateChecker attributed the pattern to local rents. In Cornwall, 83.6 per cent of retail, hospitality and leisure properties are valued at £12,000 or less and already pay nothing; in North Yorkshire the figure is 77.7 per cent. The firm said both councils were large enough that the number of properties affected was still among the highest in England.
In outer London, it said, rents put a typical small shop above the old £12,000 limit but below the new £18,000 one, placing between 26 and 31 per cent of properties in the band. Most small shops in central London are valued above £18,000 and see no change, according to the analysis.
Shops make up most of the total
Shops account for about 85 per cent of the properties that stop paying across the ten councils. In Birmingham, 2,025 of the 2,417 are shops, alongside 130 restaurants, 52 salons and 50 cafés.
North Yorkshire’s total includes 131 pubs, 82 cafés and 58 guest houses, while Cornwall’s includes 128 holiday lets, 107 cafés and 74 pubs. Manchester’s includes 135 showrooms.
An upper estimate
BusinessRateChecker described its figures as an upper estimate, because the relief goes only to a business with one property or a small second one, and Valuation Office data does not show who occupies which premises.
Its count of eligible properties across England is 93,887, against the government’s estimate of about 70,000 businesses, so the real figures are likely to be around a quarter lower, the firm said.
Vape shops lose small business rate relief from April 2027 but cannot be identified in the data, so they remain in the counts. Holiday lets count as business property only if they are let for enough nights a year, meaning not all of Cornwall’s will qualify, the firm said. The savings apply to England only.
Small business rate relief usually has to be claimed from the local council, according to BusinessRateChecker, so businesses that become eligible in April may need to apply. Government guidance directs ratepayers to their council.
Under the new threshold, the firm said, a property valued at £18,500 pays part of its bill, while one valued at £18,000 pays nothing.
