Chancellor says economy ‘stuck’ as Treasury reviews business rates cliff edges

The Chancellor has said the UK economy feels “stuck” as she revealed plans to consider business rates reforms including removing “cliff edges” for small firms.

The Treasury is looking at changes to the current system of business rates – the tax on UK business properties – as part of efforts to cut red tape and improve growth.

In an initial report into business rates, the Treasury said it would consider overhauling small business rates relief rules which “can discourage” expansion and investment.

The current rule means that when a company opens a second property it loses access to all small business rates relief unless it meets specific criteria.

It comes as part of the Government’s commitment to review business rates more widely amid mounting calls from firms and business groups for wholesale reform of the system.

It is understood that bosses of major high street firms, such as John Lewis, met with the Chancellor Rachel Reeves last week and encouraged a shake-up of current business rates rules.

Reeves said: “Our economy isn’t broken, but it does feel stuck. That’s why growth is our number one mission.

“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.”