An estimated 100,000 jobs in high street stores are at risk if the Labour Party proceeds with its proposed tax changes, according to industry leaders. Concerns have been raised that up to 400 major retailers across the UK, including supermarkets and department stores, could shut down if a planned revision of business rates is implemented. The British Retail Consortium has pointed out that about 4,000 large stores with a rateable value exceeding £500,000 are potentially affected. If these 400 stores were to close, it could result in a significant loss of jobs and a substantial decrease in business rates revenue for local councils.
During a recent meeting with store executives, Chancellor Rachel Reeves was urged to urgently reform the business rates system. Retailers emphasized that high rates bills are a significant financial burden, ranking second only to wages for businesses like John Lewis and Waitrose. Helen Dickinson, the CEO of the British Retail Consortium, highlighted the importance of large stores in attracting footfall to high streets and supporting local businesses. She warned that forcing these stores into a higher tax band could lead to job losses, further store closures, and economic repercussions.
The retail sector, which contributes 5% to the economy but pays more than 20% of all business rates, is calling for a fairer approach to alleviate the pressure on large retailers. The BRC proposes excluding large stores from the increased rates and adjusting the tax burden on other property types. The Treasury has indicated that detailed plans will be revealed in the upcoming Budget, with assurances that only a small fraction of properties will experience higher rates.
In response to concerns, the Treasury emphasized its commitment to creating a fairer business rates system to support businesses and stimulate investment. Lower tax rates for retail, hospitality, and leisure properties are set to be introduced from April, funded by increased rates on a limited number of high-value properties. The government aims to address issues like ‘cliff edges’ in the current system to aid small business growth.
Meanwhile, discussions are underway to address challenges faced by small businesses regarding rates relief rules. Chancellor Reeves is exploring ways to eliminate barriers to expansion and investment for small firms. These reforms are part of broader efforts to boost economic growth and create a more favorable environment for businesses of all sizes.
Industry voices, including UKHospitality, have welcomed the government’s initiative to reform the business rates system, acknowledging the longstanding issues faced by sectors like hospitality.