Autumn Budget 2025: what High Street small businesses need to know

High street shops, cafés, pubs and other small businesses got a hefty dose of news in the Autumn Budget 2025. The Chancellor unveiled a mix of tax breaks and new rules aimed at rejuvenating Britain’s high streets. From a permanent cut to business rates for retail premises to measures levelling the playing field against online competitors, and a crackdown on illicit activity in local shops, there’s a lot for high street business owners to digest. We asked Kirsty McGregor, Capitalise's Accountant in Residence, what businesses should know and prepared a detailed review of the measures announced

Accountant Kirsty’s McGregor’s take on the announcements

“The High Street provides so much more than just retail premises. Combatting loneliness for our older generations, providing the first job for so many young people, providing flexible hours for those with caring responsibilities and bringing communities together with festivals, carnivals and markets. Some announcements could have been better for the high street, but the Chancellor made an effort to provide some good news. As past generations have had to do, the current business owners will have to continue to adapt to the challenges of surviving and thriving on the high street. Those businesses which recognise how to maximise their opportunities, will be successful. Using technology to be more efficient and open up more customer channels, whilst leveraging the value we all place on human contact and a sense of belonging. "

Those businesses which recognise how to maximise their opportunities, will be successful.

Permanent cuts to business rates for retail, hospitality and leisure

One of the headline moves is a permanent reduction in business rates for businesses in retail, hospitality and leisure (RHL) From April 2026, over 750,000 shops, pubs, restaurants and other RHL properties will enjoy lower rates, as their business rates multipliers will be set 5p lower than the normal level for other businesses. For example, if you run a boutique or café with a rateable value under £500,000, you’ll permanently pay a smaller share in business rates each year than you would have before. This isn’t a one-off holiday, it’s a structural cut built into the system. 

To fund this change fairly, the government is asking the largest properties to chip in a bit more. A new “high-value” business rates multiplier will apply to properties with rateable values above £500,000, such as giant warehouses or flagship stores as quoted by the Chancellor. These valuable sites represented roughly the top 1% most expensive properties and will see a slightly higher rate at about 2.8p above the standard rate – while all other businesses get the cut

The overall effect is to shift some of the tax burden off local high street firms and onto the very largest commercial sites ( like online retailers’ distribution centres), making the system fairer for small bricks-and-mortar businesses.

Relief for revaluation: £4.3bn support package

Business rates are being rebalanced. Many companies still face changes in their bills due to a nationwide property revaluation. To prevent rate shocks, especially for sectors emerging from the pandemic downturn, the Budget includes a £4.3 billion support package to soften the blow. This will cap how much bills can rise for those hit hardest by the 2026 revaluation. In fact, more than half of ratepayers won’t see any increase at all in 2026, and about 23% will actually see their bills decrease due to updated valuations. For small businesses that do face an uptick in rates, special relief schemes can help. There’s an extended “Supporting Small Business” (SSB) scheme worth over £500 million to shield the smallest firms from big jumps

For independent shopkeepers and pub owners, the SSB relief is being expanded to those coming off the previous retail hospitality and leisure discounts, so that your bills don’t jump straight from a COVID-era discount to the new rates all at once. If you benefited from temporary RHL relief in recent years, you’ll get a gradual transition to the new permanently lower rate instead of a sudden change. While property values (and thus rateable values) may rise as the economy recovers, the tax system is smoothing out the adjustment period for local businesses.

In short, the government is capping and phasing in rate increases to ensure high street entrepreneurs aren’t caught off guard. Even large properties like airports and hotels get help under a new transitional relief plan, so the local shop or café certainly won’t be left in the lurch. 

Levelling the playing field with online retailers

High street retailers have long felt unfairly undercut by online shopping giants who don’t face the same overhead. The Autumn Budget addresses one particular imbalance: the tax loophole on low-value imports. Currently, overseas sellers can ship inexpensive goods into the UK without paying customs duties, which gives online marketplaces a price advantage over domestic shops. The government is now scrapping the “low value import relief” that lets some online retailers import items (worth £135 or less) duty-free. 

This is a significant policy shift to “ensure all businesses pay equivalent tariffs,” not only brick-and-mortar stores. This will take a while to kick in though as it’s slated to be implemented by March 2029 at the latest.

The UK is here moving in line with partners like the EU and US who are also closing tax loopholes on low-priced e-commerce goods Additionally, this is part of a broader theme of the Budget: future-proofing fair competition. The Treasury explicitly says it is targeting reliefs and reforms to create a “more level playing field” so that local businesses aren’t disadvantaged. 

Easing planning and licensing for High Street growth

Another less-noticed but important set of measures focuses on cutting red tape for high street businesses. Planning rules and licensing requirements can often make it hard for a pub to add a beer garden or for a shop to extend its hours or floor space. In response to pleas from the industry, the government announced it will “explore further planning reforms to make it easier for hospitality and high street businesses to expand and grow.” This could mean simpler processes to get change-of-use approval or extend premises, though details will follow. The mere fact it’s on the agenda is a positive sign if you’re thinking about growing your footprint. On the licensing front, local authorities are being nudged to be more business-friendly. The Budget introduced the first ever National Licensing Policy Framework, which will instruct councils in England and Wales to consider the need to promote economic growth when making licensing decisions. 

To drive these reforms home, the government is appointing a new Retail and Hospitality Envoy that wil act as an official champion for high street businesses within Whitehall. This Envoy’s job will be to make sure the voices of shopkeepers, restaurateurs and other local traders are heard when policies are made. For small business owners, having an advocate at the heart of government is encouraging. It signals that your struggles with things like onerous licenses or planning delays are on the government’s radar, and there’s a dedicated person pushing to address them. All of these steps aim to remove some of the structural hurdles that make high street life harder than it needs to be. If you’ve ever felt drowned in paperwork trying to improve or expand your business, help may be on the way.

Clamping down on illicit High Street activity

The Budget announced a crackdown on illegal activity in high street premises that harm communities and undercut honest businesses. The government noted concerns that certain small shops, like some mini-marts, vape shops, nail salons or car washes can be fronts for illicit trade, money laundering or tax evasion. 

To tackle this, a new High Streets Taskforce is being created to coordinate enforcement against organised crime on high streets. This is a cross-agency effort, bringing together law enforcement, HMRC, Trading Standards and others to share intelligence and target hotspots of illegality. In practice, we can expect to see more surprise inspections and raids on shops that are suspected of selling illicit tobacco, fake goods or operating dodgy cash-only schemes. The plan includes funding for at least 45 additional Trading Standards officers devoted to rooting out high street crime, and beefing up coordination with Border Force to stop smuggled products at entry points. 350 new HMRC criminal investigators are being assigned to go after the worst cases of tax evasion and fraud by small businesses on the high street. This means if someone down the road has been running a cash-only business and not reporting income, or selling untaxed cigarettes under the counter, the authorities are far more likely to come knocking now. The Budget explicitly mentions extra enforcement focusing on illicit tobacco and vaping products, among other scams. For law-abiding businesses, this is welcome news – it’s hard to compete with the convenience store that’s selling counterfeit goods on the cheap. By boosting enforcement, the government aims to protect legitimate shop owners and restore trust in local shopping areas.

What High Street business owners should do next

With these changes on the horizon, here are a few steps small business owners can consider:

• Check your rateable value and reliefs: find out your property’s rateable value and whether it falls under the £500k threshold. This will tell you if you’ll qualify for the new lower retail/hospitality/leisure business rate from 2026. Come January 2026, the government will update online tools so you can check your business rates relief eligibility

• Plan for potential savings: if you were getting a temporary retail relief, look for communications from your local authority about the transitional relief so you know what your bills will look like over the next couple of years.

• Monitor planning/licensing updates: If you have expansion plans, like adding an outdoor seating area or opening a second location, keep an eye on the upcoming planning reform proposals. The rules might soon get more favourable for you. Also, when dealing with council licensing, don’t hesitate to remind them of the new national guidance to support economic growth as the climate for expansion is improving, so consider dusting off those growth ideas.

• Stay compliant and secure: with enforcement ramping up, double-check that your own operations are above board. Ensure you’re properly reporting sales, paying any duty on products like alcohol or tobacco, and keeping your business licenses in order. While the crackdowns are aimed at criminal activity (which most small businesses aren’t involved in), it’s a good prompt to tighten up any loose ends. 

At Capitalise, we’ll continue to monitor how these Budget changes unfold and translate them into practical insights for small business owners.