Burnham’s business rates could cost £880m a year

By the Editorial Team · Monday, July 6, 2026

Andy Burnham has proposed raising the threshold for full small business rates relief from £12,000 to £18,000 in rateable value, potentially reducing liabilities for over 140,000 small premises in England by around £880 million annually. This plan aims to support struggling high street businesses by shifting more tax burden onto larger commercial properties, including major online retailers, as part of his Labour leadership campaign.

Andy Burnham's proposal to reform business rates to support small high street businesses could reduce liabilities by approximately £880 million annually, according to recent estimates. The plan would increase the threshold for full small business rates relief, potentially benefiting over 140,000 smaller premises across England.

Burnham, a leading contender for the Labour Party leadership and former mayor of Greater Manchester, has suggested this change as part of broader efforts to aid struggling local businesses. His proposal includes raising the threshold for 100 percent business rates relief from properties with a rateable value of £12,000 to £18,000. Additionally, the upper limit for tapered relief would rise from £15,000 to £21,000. These adjustments aim to ease financial pressures on small firms, allowing many to avoid paying business rates altogether.

To offset the expected revenue loss, Burnham has indicated plans to increase property taxes on larger commercial properties, especially targeting extensive warehouses operated by major online retailers like Amazon. Speaking during the recent Makerfield by-election, which he won, Burnham emphasized the need for "online giants" to pay a fairer share to support Britain’s high streets and smaller businesses. He also mentioned that higher business rates might apply to major developments on the outskirts of towns and cities, with the revenue used to reduce rates for pubs and other small businesses.

Forecasts by the global tax consultancy Ryan highlight the significant potential impact of Burnham’s proposals. Alex Probyn, a property tax practice leader at Ryan, acknowledged the positive objective of supporting small businesses but raised concerns about the funding mechanism. He noted that larger commercial properties already contribute more through the existing business rates surtax—introduced by the government in April—which applies a 2.8p levy on properties with rateable values exceeding £500,000. Probyn questioned whether these large properties would be asked to shoulder an even greater financial burden under Burnham’s plan.

The government’s recent reforms included the surtax with the aim of redistributing tax liabilities toward larger businesses to alleviate the burden on smaller retail, hospitality, and leisure sectors. However, many small businesses still face rising business rate costs over the coming three years, underscoring ongoing challenges in balancing fiscal support with revenue needs.

Burnham has stressed his commitment to maintaining Labour’s fiscal rules while allowing “room for movement on tax” to achieve his goals of revitalizing high streets and leveling the playing field for smaller enterprises. The full details and potential implementation of these reform proposals are expected to be further clarified as the Labour leadership contest progresses.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.