Business Rates 2026: Protect Your Growth Budget

5,500+ UK small businesses don’t sign an open letter to the Chancellor for fun. They do it when a fixed cost is about to jump—and there’s nowhere to hide.

From 1 April 2026, business rates in England and Wales will be recalculated using new rateable values and, crucially, the Retail, Hospitality and Leisure Business Rates Relief (which provided 40% off bills in 2025/26) is due to end. For high-street firms already absorbing higher wages, energy, insurance, and Covid-era debt, that relief cliff edge feels existential.

If you’re a UK solopreneur—or you run a tiny team—this isn’t “politics over there.” It’s a direct hit to your marketing budget, your pricing, and your growth plan. Most companies get this wrong: they treat policy shifts as background noise, then scramble when cashflow tightens. A better approach is to plan now and make your marketing do more work per pound.

Business rates are a fixed cost. Marketing is one of the few big levers you can still pull quickly.

What’s changing in April 2026 (and why it’s spooking owners)

The key point: business rates are calculated using a property’s rateable value—the government’s estimate of what the property could rent for—multiplied by a multiplier set by government, with reliefs applied depending on eligibility.

Here’s what’s making headlines today (12 January 2026):

• New rateable values come into force from 1 April 2026.
• The Retail, Hospitality and Leisure (RHL) relief that discounted bills by 40% in 2025/26 is expected to end.
• Government is also setting new sector multipliers, lowering bills for some businesses and increasing them for others to balance the cost.

The TechRound report describes a coalition of pub landlords, café owners, shopkeepers and local employers warning Chancellor Rachel Reeves that the upcoming changes could push viable firms into closure. The open letter—organised by Rupert Lowe MP—frames business rates as a penalty on “physical presence” and asks for an urgent review and mitigation before April.

For marketing and growth planning, the takeaway is simple:

Even if your bill doesn’t rise, uncertainty rises—and uncertainty changes buyer behaviour. When local businesses get squeezed, footfall patterns shift, discretionary spend tightens, and competitors start discounting to survive.

Why business rates are a marketing problem (not just a finance problem)

Answer first: Business rates reduce the cash you can invest in demand generation, and they raise the revenue you must generate just to stand still.

Solopreneurs often treat marketing as “optional spend.” In reality, marketing is your cashflow stabiliser when costs go up.

The fixed-cost trap: rates don’t care if you had a bad month

Unlike ad spend, business rates don’t flex with revenue. That’s why they feel brutal: you can’t pause them like you can pause a campaign.

If your rates rise by, say, £250/month, you don’t just “find £250.” You usually need to find £250 plus margin.

A quick way to think about it:

• If your gross margin is 50%, you need £500 extra sales per month to cover £250 extra cost.
• If your gross margin is 30%, you need ~£833 extra sales per month.

That’s why policy changes directly impact your growth strategy: your pipeline targets should reflect new fixed costs, not last year’s numbers.

The high street penalty changes positioning

The open letter’s strongest line is also a positioning lesson:

“We can’t move online or relocate to a warehouse.”

If you do have any flexibility—appointment-only hours, hybrid fulfilment, pop-up locations, shared studios, home-based admin—you can position your business as:

• more convenient (delivery, click & collect, mobile service)
• more local (community-first, partner-led)
• more reliable (availability, response times, guarantees)

When fixed costs rise, customers become more selective. The businesses that communicate clear value win.

Practical steps: protect your marketing budget before April 2026

Answer first: Ring-fence the channels that reliably produce leads and cut everything else. You don’t want “more marketing.” You want marketing that converts under pressure.

Below is a plan I’ve found works when costs spike.

1) Do a “rates shock” forecast in 30 minutes

Create two scenarios for April–September 2026:

1. No change in rates
2. Worst plausible change (pick a number that makes you uncomfortable but isn’t fantasy)

Then decide today:

• the minimum monthly leads you must generate
• the maximum cost per lead you can afford
• the minimum conversion rate you need from enquiry to sale

This gives you a concrete marketing target instead of vague anxiety.

2) Prioritise channels that compound (SEO + email)

Paid ads are useful, but if you’re heading into a period of cost pressure, compounding channels reduce risk.

For a UK solopreneur, that usually means:

• Local SEO (Google Business Profile updates, location pages, review collection)
• Service pages that convert (clear offers, proof, pricing anchors)
• Email list building (lead magnet, enquiry follow-up sequences)

A simple rule: if a channel doesn’t keep producing after you stop paying, it’s not your foundation.

3) Turn “policy pressure” into content that attracts customers

Most founders avoid talking about rising costs because it feels negative. I disagree.

Handled well, it’s persuasive because it’s real.

Content angles that work without sounding whiny:

• “Why we’re keeping prices stable (and what we changed internally)”
• “What’s included in our service now (so there are no surprise add-ons)”
• “Local suppliers we’re partnering with in 2026”
• “Behind the scenes: how we reduced waste/time to protect customers”

This does two things:

1. Builds trust when people are cautious with spending
2. Positions your brand as competent, not chaotic

4) Fix the conversion leaks before you chase more traffic

When fixed costs rise, efficiency beats reach.

Run this quick audit:

• Homepage: is the primary action obvious in 5 seconds?
• Services page: do you show outcomes, timelines, and who it’s for?
• Proof: do you have testimonials with specifics (result, time, location)?
• Speed to lead: are you replying to enquiries within the same day?

If you’re in hospitality/retail/leisure, conversion also means:

• clear booking links
• current opening hours everywhere
• visible peak/off-peak offers

5) Build local partnerships as a low-cost acquisition channel

High streets survive when businesses cross-refer.

Try two partnership plays before March:

• Bundle partners: “Coffee + haircut discount,” “Gym + physio intro,” “Bookshop + workshop ticket”
• Referral swaps: two businesses email their lists with a shared offer (no paid ads required)

This is brand positioning in action: you’re not just selling; you’re part of the local fabric.

What should you do if your rates rise? (A founder’s decision tree)

Answer first: Don’t start by cutting all marketing. Start by cutting low-performing marketing and protecting lead flow.

Here’s a straightforward decision tree you can use:

1. Rates rise is small (absorbed by one extra sale/week):

   • keep budgets stable
   • tighten tracking (calls, bookings, enquiries)
   • push retention (upsells, memberships, repeat visits)

2. Rates rise is material (requires meaningful new revenue):

   • reduce “nice-to-have” spend (tools, sponsorships, unfocused ads)
   • double down on 1–2 channels that convert (often local SEO + email)
   • add a short-term offer with a hard end date (2–3 weeks)

3. Rates rise threatens viability:

   • renegotiate premises terms where possible
   • shift to appointment-only / fewer open hours (if it protects margin)
   • repackage into higher-margin offers (subscriptions, bundles, premium slots)
   • run a “keep us here” community campaign (transparent, specific goal)

The unpopular truth: if you’re in a premises-heavy model, your marketing needs to sell certainty—availability, quality, and clear value—not vague brand vibes.

The bigger lesson for UK solopreneur growth

Answer first: Policy risk is now part of your go-to-market plan.

The open letter to Rachel Reeves is a signal that many local businesses feel they’re at breaking point. Whether government adjusts the rollout or not, April 2026 is now a planning deadline.

If you’re building a one-person business, the goal isn’t to become “online-only” at all costs. It’s to become resilient:

• resilient demand (repeat customers + referrals)
• resilient acquisition (SEO + email + partnerships)
• resilient positioning (clear value and community credibility)

Your marketing strategy shouldn’t pretend the macro environment doesn’t exist. It should translate it into practical decisions: what to pause, what to protect, and what to improve.

As April approaches, one question is worth putting on your calendar:

If your fixed costs rose next quarter, would your marketing system keep you steady—or would it collapse?