Rates relief threshold could rise from £12,000 in 28 October Budget

Small business rates relief currently exempts firms whose premises have a rateable value below £12,000. That figure was frozen while the nationwide revaluation of commercial property took place.

Uprating it in line with inflation would take it to £17,096, according to reporting on the options before the Treasury. Firms between the old and new lines would pay nothing at all.

A second option under consideration is tapered relief for properties with a rateable value of up to £20,000.

Neither is settled. Mr Healey is said to be considering changes to relief as part of a package for his first Budget on 28 October, with the cost of doing business expected to be one of its themes.

The Treasury will not confirm any of it. "Decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals," a spokesman said.

The pressure comes from bills that have already moved. After April's revaluation, some ratepayers saw increases of as much as 80 per cent, phased in over several years.

That phasing is the third lever. Smaller firms currently have their bills capped at no more than 5 per cent this year, 10 per cent next year and 25 per cent in 2028-29, plus inflation. Raising transitional relief and lengthening the transition period is also on the table.

The Chancellor has held a series of workshops with business groups over the past fortnight on reviving the UK's shops. They follow Prime Minister Andy Burnham's pledge to turn high streets, which he has called "markers of decline", into a "symbol of Britain's renaissance".

Trade bodies have put numbers on what a higher threshold would do. The British Beer and Pub Association estimates that lifting it from £12,000 to £18,000 would take 5,000 pubs out of business rates entirely, and would cut bills for coffee shops and smaller retailers.

More than four pubs are closing a day, according to the Campaign for Real Ale.

Separately, Mr Burnham has promised a 20 per cent rates cut for pubs, clubs and live music venues, which he says will save the average firm £1,100 a year from April 2027. Kate Nicholls, chairman of UKHospitality, said the body was "working with the government to make sure that restaurants, cafes and hotels receive comparable support on business rate changes at the Budget".

The Chancellor is working against a constrained backdrop. He faces wider pressure on the public finances and a £5bn defence budget deficit left by the former prime minister, Sir Keir Starmer. Government sources have confirmed he is looking at widening the high value council tax surcharge to properties worth more than £1.5m, affecting up to 300,000 homes.

For a founder with a shop, workshop or unit, the practical step is to check the rateable value on the current valuation and see where it sits against £12,000, £17,096 and £20,000. Those three numbers decide whether 28 October is a bill of nothing, a tapered bill, or no change at all.