This story arrived wearing a books jacket. Philip Pullman calling independent bookshops “lighthouses”, Maggie O’Farrell calling them the beating hearts of the high street, a run of very good writers lending their names to a campaign. It has been covered as a culture story, and on that level it is a nice one. Underneath it is something much drier and much more important, and it applies to a great many businesses that have never sold a book in their lives: England has started allocating business rates relief by sector.
Here is my view of it. The booksellers are not really asking for a subsidy. They are pointing out that they have been sorted into a category by a process they cannot see, cannot appeal and had no part in. Up to now, the main relief in the system keyed off the size of your property — small business rate relief looks at rateable value and does not care what you sell. From April 2027 there is a second principle sitting alongside it, and that one asks what trade you are in. That is a change every owner with a shopfront should understand, because it means your rates bill has stopped being purely a function of your property and started being partly a function of whether your industry has someone making its case in Whitehall. You cannot budget for that, and you cannot influence it. The booksellers just happen to be the first group to find out they were on the wrong list.
What actually happened
In July the government announced a 20% reduction in business rates for pubs, clubs and live music venues from April 2027. Independent booksellers were not included. On 13 August the Booksellers Association sent an open letter, signed by 234 independent booksellers, calling on the Prime Minister and the Chancellor to give bookshops the same consideration. The letter says bookshops were “deeply disappointed” to learn they would not be included, and argues that the government has already accepted the principle that businesses delivering significant community benefit deserve targeted support. More than a dozen authors have backed it, including Katherine Rundell, Elif Shafak, Anthony Horowitz, Adam Kay, Lemn Sissay and children’s laureate Patrice Lawrence. The associated campaign urges the Greater Manchester mayor, Andy Burnham, to extend the relief, alongside his recently announced plans to let local authorities reject new betting shops and adult gaming centres.
The Treasury’s answer, as reported, is that bookshops already receive support through permanently lower business rates multipliers and a £4.3bn package intended to limit increases in bills. Both of those things are true. Neither of them is a reduction.
The number to hold onto: £4,563
The Booksellers Association commissioned the economic consultancy Cebr to put a figure on it. Cebr found that independent bookshops in England which are not eligible for full small business rate relief face an average annual increase of £4,563 by 2029-30, with some bills expected to double when transitional relief ends. Across the sector, business rates receipts are projected to rise 45% in nominal terms. Separate Booksellers Association research found 85% of independent booksellers say they are now less likely to invest in stock, staffing, events or their premises.
That italicised clause is the whole thing, and it is what decides whether this article is about you. The rules, as they stand on GOV.UK today: if your property’s rateable value is £12,000 or less and it is the only property your business uses, you pay no business rates at all. Between £12,001 and £15,000 relief tapers from 100% down to 0% — GOV.UK’s own worked points are 50% off at a rateable value of £13,500 and 33% off at £14,000. Above £15,000, you get none of it and you carry the full bill.
So the businesses inside the Cebr number are not the smallest ones. They are the ones just over the line — the shop that took the slightly bigger unit, the salon that knocked through, the practice that added a room.
Worked example: the £4.00 book, and what your version of it is
Cebr published two numbers together: an average increase of £4,563 a year, and the statement that the average independent bookshop would need to sell an extra 1,141 books a year to cover it. Divide one by the other and you can see the assumption they were working to: £4,563 ÷ 1,141 = £4.00 of gross profit per book. That is Cebr’s own arithmetic, not mine, and it is the most useful thing in the whole story — because it gives you the method for working out your own version.
The method is simply this: take the rates increase and divide it by the gross profit you make on one unit of whatever you sell. Not the price. The gross profit. Here is the same £4,563 run against three illustrative businesses — the margins are chosen to be realistic and are clearly illustrative, so swap in your own and the arithmetic still works. All three are assumed to trade six days a week, so 312 trading days.
- The bookshop, at £4.00 gross profit a book: 1,141 extra books a year, which is 3.7 books a day, every day it opens.
- A cafe, at £2.20 gross profit a coffee: 2,074 extra coffees a year, or 6.6 a day.
- A salon, at £28 gross profit a cut: 163 extra cuts a year, or roughly 3 a week.
This is why the headline figure misleads people. As a number, £4,563 reads as survivable — it is less than a hundred pounds a week. As a workload, it is an extra six or seven covers a day, forever, with no more staff and no more space, just to stand still. Those are two completely different pieces of news about the same business, and only one of them shows up on the rates demand.
The cliff edge nobody models
Now put two shops side by side on the same street. The first has a rateable value of £14,000: on GOV.UK’s published taper it gets 33% off its bill. The second has a rateable value of £15,100: it gets nothing, and it is in the group carrying the increase. About £1,100 of rateable value separates them — a back room, a bit of frontage, a mezzanine someone boarded out years ago. If you are anywhere near that line, the rateable value consequence of extending, refitting or taking adjoining space is a real number that belongs in the decision, and in my experience it is almost never in the spreadsheet when the decision gets made.
Why “we already lowered the multiplier” is not the answer
The Treasury is right that bookshops sit on permanently lower multipliers and that £4.3bn has been put behind limiting increases. But sector receipts are still projected to rise 45% nominally, and it is the ending of transitional relief that Cebr identifies as the thing capable of doubling individual bills. A lower rate applied to a larger base, inside a total that is growing, is not a cut. It is a smaller increase, and a smaller increase still has to be paid for in coffees.
What this means for you, depending on where you sit
Rateable value £12,000 or under. None of this reaches you — but only if you are actually getting small business rate relief, and it is not applied automatically in every case. Confirm it is on your bill. This is the single most common thing we find unclaimed.
Between £12,001 and £15,000. You are on the taper, where each extra pound of rateable value costs you twice: once through the bigger calculation base, once through the shrinking relief percentage. Model this before you expand, not after the revaluation.
Above £15,000. You are the group in the Cebr number, and the exposure builds towards 2029-30 rather than arriving at once. That is genuinely good news, because it means there is time to put it in a budget instead of finding it in a bill.
Northern Ireland and Scotland. Rating is devolved, and GOV.UK’s business rates guidance explicitly redirects you if your property is in either. The £12,000 and £15,000 thresholds above are England figures and do not describe your scheme. The sector-relief principle, though, travels well — and it is worth knowing now which side of it your trade would land on.
Three things worth doing this week
- Look up your rateable value. It is free, public and takes two minutes on the Valuation Office Agency’s find a business rates valuation service. You need to know which side of £12,000 and £15,000 you are on, and most owners have never seen the figure because the council sends a finished bill with the workings left off.
- Check you are claiming every relief you qualify for. GOV.UK lists them in one place — apply for business rates relief — and small business rate relief, retail, hospitality and leisure relief and supporting small business relief are all separate things with separate tests. Our business rates calculator will get you to the figure before the demand does.
- Put a real number in your 2027 and 2028 budget. Take your own gross profit per unit, divide the expected increase by it, and write down the sales volume that covers it. That single line changes the conversation from “rates went up” to “we need six more covers a day”, which is something a business can actually act on. This is exactly what our cashflow and budgeting work is for.
What is still uncertain, and when you will know
Whether bookshops get added to the relief. The letter went on 13 August. The Treasury’s reported position points to the multipliers and the £4.3bn package, and no extension has been announced. The realistic decision point is the Budget, which is where relief categories get set.
The pubs, clubs and live music relief is announced, not in force. It starts in April 2027. Between now and then the categories can widen, narrow or be redefined, and the definitions matter enormously — a “club” and a “live music venue” both need boundaries drawn, and businesses sitting near those boundaries will find out late.
The Cebr horizon is 2029-30, not next April. That figure is where the increase lands after transitional relief has finished unwinding, which is why it is a budgeting problem now rather than a cash problem now. The bills that double do so at the end of that transition, not at the start.
Where we come into this
There is no deadline in this story and nothing to panic about, which is precisely why it will be ignored until it is expensive. The businesses that get hurt by rates are almost never the ones that had a bad year. They are the ones that never looked up their rateable value, never checked whether a relief applied to them, and built next year’s budget by adding a bit to last year’s rates line.
Our advisory services work is where fixed costs like this get looked at against pricing and volume rather than in isolation, and our management accounts work is what puts your actual gross profit per unit in front of you — which, as the £4.00 book shows, is the number the whole calculation hangs on. If you are a small business in Greater Manchester, our Manchester and Wigan & Leigh offices cover exactly the high streets this campaign is aimed at.