For emerging designers, having access to affordable physical space to showcase and sell their creations is an important part of that picture. Pop-ups, showrooms and eventually permanent retail premises all provide the opportunity to reach customers, buyers and build brand presence. It provides critical space for customers to interact with the creations in a way that is not possible online.
The Autumn Budget 2026 business rates measures therefore provide some welcome news. From 1 April 2027, the rateable value threshold for 100% Small Business Rates Relief for qualifying retail, hospitality and leisure premises in England will increase from £12,000 to £18,000, with tapered relief extending to £21,000. Qualifying retail premises will also benefit from a two-year real-terms freeze on business rates bills in 2027/28 and 2028/29.
For independent fashion businesses that relief could make a meaningful difference to the cost of establishing or maintaining a physical presence. The Government believes its measures will result in half of qualifying retail, hospitality and leisure properties in England paying no business rates, while 110,000 properties will see their rates fall next year. If correct this should help reduce one of the costs that can be a stumbling block to expansion or sustaining a physical presence although there are wider challenges facing young fashion businesses. These include access to finance, production costs and routes to market.
Large department stores and flagship luxury occupiers will usually have a rateable value sitting well above the new Small Business Rates Relief thresholds so will not benefit from this. However, they may still benefit from the separate two year real-terms freeze on business rates for qualifying retail premises, which is not subject to the same rateable value limit.
The measures are therefore relevant at both ends of the market. They may give smaller occupiers such as boutiques earlier opportunity and greater breathing room when considering taking or retaining physical space, while providing larger retailers with greater certainty over one element of their occupational costs. These measures will form part of the commercial discussions when considering the affordability of taking new premises or renewing existing leases particularly in prime retail space. It will be interesting to see whether it is enough to help emerging fashion brands establish a presence in prime locations.
The Budget also included measures aimed at supporting emerging fashion businesses at an earlier stage. From April 2027, the trading allowance will increase from £1,000 to £3,000, allowing individuals to earn more from small-scale trading activities before income tax becomes payable on that income. The increased allowance could give emerging designers and fashion entrepreneurs greater scope to test ideas and begin generating income before taking on the full costs of running a business. The proposed young entrepreneur’s allowance will also cover a year of living costs for eligible young founders as they turn their ideas into businesses.
For emerging designers, these measures could ease some of the financial pressures at the outset, while the business rates reforms could provide further assistance as their businesses grow and they look to establish a physical retail presence.
If, as Rosie Wrighting says, we want the next Lee McQueen or Paul Smith to see a future in British fashion, the ability to turn creative talent into a sustainable business matters. These changes will not achieve that alone, but reducing the burden associated with bricks-and-mortar retail and improving support for entrepreneurs is a welcome step.
