Retailers have issued a plea to Chancellor Rachel Reeves, urging her to address business rates concerns.
- A forthcoming £2.7 billion tax increase could heavily impact the retail, leisure, and hospitality sectors.
- The relief scheme that currently caps at £110,000, is set to conclude in April next year.
- Retail leaders from major UK businesses have formally requested a revision in the business rates system.
- The British Retail Consortium suggests a 20% downward rate adjustment to ease the financial burden.
Retailers across the UK are appealing to Chancellor Rachel Reeves for action on business rates, highlighting the urgent need for reform. New analysis suggests a potential tax increase of £2.7 billion, which will disproportionately affect smaller businesses in the retail, leisure, and hospitality industries. This concern arises as the current relief scheme, capped at £110,000, will end in April next year, posing a significant financial challenge to over 252,000 shops, cafes, pubs, restaurants, and entertainment venues, such as bowling alleys.
Data from real-estate firm Altus Group reveals that this ending relief scheme will contribute to an overall £545 million tax rise, with nearly half—£250 million—impacting the retail, leisure, and hospitality sectors specifically. This insight underscores the financial strain anticipated by these industries should no adjustments be made to current policies.
High-profile figures and organisations within the retail sector are actively voicing their concerns. Andrew Goodacre, CEO of the Bira trade body, stressed to The Guardian the critical nature of extending relief: “The chancellor has the power to extend the retail, hospitality and leisure relief, which is absolutely vital if high streets are to be revitalised and grow. We urge the government to consider this crucial support for the retail sector.”
An open letter orchestrated by the British Retail Consortium has further amplified this appeal, signed by over 70 retail executives from well-known companies such as M&S, Primark, Poundland, Ikea, and Tesco. The letter calls for the introduction of a ‘Retail Rates Corrector’—a proposal aimed at levelling the competitive playing field by reducing business rates on retail properties by 20%. This initiative seeks to rectify the existing imbalance where the retail industry bears 7.4%, approximately £33 billion, of the total business taxes, with a fifth of this being business rates.
The retail sector is collectively urging the government to address the impending business rates changes to maintain industry viability.
