Downing Street used its annual Christmas lights switch‑on to showcase small firms ahead of Small Business Saturday on Saturday 6 December 2025. The Prime Minister’s Office framed the event around measures confirmed at Budget 2025, focusing on business rates, investment incentives, apprenticeships and late payment reform published by HM Treasury on 26 November.
No 10 cited data from Small Business Britain indicating stronger festive trading: households could spend over £23 billion, with about £5.3 billion flowing to small firms - a 19% year‑on‑year uplift. Organisers also report sustained public backing for independents, reinforcing the policy emphasis on high streets and local service providers.
On business rates, HM Treasury confirms two permanently lower multipliers for eligible retail, hospitality and leisure properties from 1 April 2026. All ratepayers will also move to lower national multipliers after the 2026 revaluation, with the small business rate at 43.2p and the standard rate at 48p.
To fund this rebalancing, a new high‑value multiplier applies to properties with a rateable value of £500,000 and above, set at 50.8p in 2026‑27. A three‑year £4.3 billion transition package will cap large bill increases via redesigned Transitional Relief and an expanded Supporting Small Business scheme; the Treasury will fully compensate local authorities for revenue impacts.
Capital allowances are adjusted to support near‑term investment. The Annual Investment Allowance remains at £1 million, a level intended to cover the needs of most SMEs. A new 40% first‑year allowance for main rate assets starts on 1 January 2026, while the main pool writing‑down allowance falls from 18% to 14% from April 2026. Cars and second‑hand assets are excluded from the new allowance.
Budget 2025 also sets out £725 million for the Youth Guarantee and the Growth and Skills Levy, including fully funded SME apprenticeships for eligible people under 25. From 2026, reforms will simplify the system: a 12‑month expiry window for levy balances, and a 75% co‑investment rate once levy‑payers exhaust their funds, alongside streamlining of apprenticeship standards.
To widen access to capital and talent for scaling firms, the government will expand enterprise tax reliefs. Company eligibility limits for Enterprise Management Incentives rise from April 2026, while Enterprise Investment Scheme and Venture Capital Trust company investment and lifetime limits increase. The VCT income tax relief rate will reduce to 20%, aligning incentives with the enlarged eligibility.
Transport costs remain in scope. The temporary 5p fuel duty cut is extended to 31 August 2026 and the planned 2026‑27 indexation is cancelled, before rates step back towards March 2022 levels by March 2027. This preserves near‑term support for van‑ and distribution‑reliant businesses through most of 2026.
Late payments are targeted through the Small Business Plan published in July. Proposals include maximum payment terms of 60 days, reducing to 45 days after transition, a 30‑day invoice verification period, and fining powers for the Small Business Commissioner. Audit committees would be required to oversee payment practices and statutory interest on overdue invoices would be enforced. The consultation closed on 23 October 2025 ahead of legislation.
Delivery support sits alongside the fiscal measures. The Department for Business and Trade has begun the Business Growth Service rollout, with a roadshow launched in Newcastle on 20 November 2025 to provide a single route into central, devolved and local support - including Growth Hubs, Innovate UK and UK Export Finance - aimed at saving SMEs time and money.
For owners and finance directors, the immediate planning points are practical. Re‑forecast 2026‑27 business rates using draft valuations and the new multipliers; sequence capital projects around 1 January 2026 to capture the new first‑year allowance; and prepare procurement and supplier terms for the incoming 60/45‑day payment limits and board‑level oversight.
The Downing Street event also recognised frontline workers and community champions. Fourteen‑year‑old litter picker Samuel Salamone switched on the lights; the policy focus, however, was on cutting operating costs and stabilising cash flow so that small firms can retain staff and invest through 2026.