Rates hike threatens 500 big high street outlets, trade bodies warn
The trade bodies said the affected sites employ about 120,000 people, whose jobs could be jeopardised by any closures
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UKHospitality and the British Retail Consortium (BRC) have called on the government to exempt hospitality and retail outlets from a proposed business rates surcharge that would apply to 5,000 high street properties with a rateable value above £500,000.
The trade bodies warned that around 500 premises could be at risk of closure if the surcharge goes ahead. The affected sites employ about 120,000 people, whose jobs could be jeopardised by any closures.
They argued the government’s manifesto commitment to reform business rates and “level the playing field” for the high street would be undermined if the surcharge is applied to retail and hospitality businesses already facing higher costs.
UKHospitality chief executive Kate Nicholls said: “The broken business rates system has punished bricks and mortar hospitality businesses for decades, with our sector paying three times more than its fair share. Reform of the system is long overdue and we now need to see the government deliver in full its pledge to level the playing field for the high street.
“That means implementing the maximum possible rates discount for properties below £500,000 rateable value, and exempting larger hospitality properties from the surcharge. Delivering both those measures is the only way to fulfil that commitment and prevent hospitality businesses from being taxed out.”
She added that the sector had already faced £3.4bn in annual cost increases in April, and warned the surcharge would add further pressure on businesses and local economies.
BRC chief executive Helen Dickinson said: “Thriving high streets depend on a vibrant mix of outlets – from shops and cafés to restaurants and entertainment venues. Large retailers are central to this ecosystem, drawing people into town and city centres and boosting footfall for surrounding businesses.
“Over the past year, retailers have faced an additional £7bn in costs – from higher employer National Insurance contributions to new packaging taxes. Introducing a business rates surtax would only add to inflationary pressures, leading to store closures and job losses. We urge the Chancellor to exempt these businesses from the surtax, helping safeguard hundreds of anchor stores and the vital jobs they sustain.”
