Last Wednesday, 28 October, John Healey gave his first Budget. The headline for anyone running a café, deli, pub or kitchen unit in England is business rates: the small business rate relief threshold for retail, hospitality and leisure rises from £12,000 to £18,000 rateable value from April 2027. If your rateable value sits under that, your bill should drop to nothing.
The Treasury’s own claim is that around 70,000 more businesses stop paying rates altogether, which it describes as about half of shops, restaurants and gyms. Treat that as their figure rather than gospel, but it is a big shift. If you are over £18,000, qualifying hospitality bills are capped at CPI inflation for two years, 2027/28 and 2028/29, so no nasty jumps there either.
Two caveats before you bank it. Rates are devolved, so this is England only; Wales, Scotland and Northern Ireland run their own schemes. And small business rate relief is aimed mainly at businesses with one property, so if you run a unit plus a shop, or two sites, don’t assume the full exemption. Check your rateable value on GOV.UK now so you know which side of the line you are on.
The other side of the ledger is wages. From 1 April 2027 the National Living Wage for over-21s goes from £12.71 to £13.21 an hour, and the 18 to 20 rate from £10.85 to £11.27. Both are up 3.9%, so roughly 50p an hour more for your older staff and about 40p for the younger ones. There was no cut to hospitality VAT despite the campaign, and employer NICs stay where they are.
For a catering business that pays drivers and kitchen porters at or near those rates, every hour spent on the road or waiting at a drop costs a little under 4% more from April. That turns van efficiency into a wages question: tighter multi-drop routes, loading in delivery order so doors are open for less time, and a van sized so one trip covers the day without coming back to reload.
Christmas 2026 is already priced, so leave that alone. Where I’d act this week is spring and summer 2027: weddings, corporate events and contract-catering renewals you are quoting now will be delivered on April’s wage rates. Build the increase in before you send the quote, not after. And if your rates bill is about to fall, it’s worth knowing what that frees up before you decide anything about the fleet.
Quick checklist
- Check your rateable value against the new £18,000 threshold on GOV.UK
- England only: Welsh and Scottish sites run on different rules
- Add just under 4% wage cost to any quote for April 2027 onwards you send this month
- Load in drop order so chilled doors open for less time
- No VAT change: invoices and menus stay at 20%
If a lower rates bill gives you room to sort the van before the April wage rise, these three suit a catering round.
- 2026 Ford Transit Custom L1H1 Limited Refrigerated Chiller Van: £35,495 +VAT
- 2026 Mercedes-Benz Citan 110CDI Base L2 Cancelled Order Refrigerated Freezer Van: £32,495 +VAT
- 2022 Renault Master 35 Business+ LWB Refrigerated Chiller Van: £27,995 +VAT
Call us on 01444 245555 to talk it through.
Sources: Budget 2026: Government extends business rates relief, ups minimum wage and offers energy bill support, What did the chancellor announce for pubs in the 2026 autumn Budget, Autumn Budget 2026: What pub operators need to know, UKHospitality responds to the Budget – UKHospitality, Walkers crisps recall expanded to new best-before date – Brit Brief, Restaurant radar: November 2026
