‘600 shops and 5,500 jobs at risk’ from government plans to raise business rates

Hundreds of stores and thousands of jobs are at risk from government plans to increase business rates for the largest shops, according to a group claiming to represent 5,000 high street businesses.

Consumers will also face higher prices, with many affected businesses planning to pass the added costs on, according to High Streets UK.

Under the government proposals, properties with a rateable value of more than £500,000 will pay more in business rates from April 2026, in order to fund a cut in the tax for smaller retail, hospitality and leisure properties with a rateable value below £500,000. The level of the new rates are due to be set in this year’s autumn budget and the plans are currently under consultation.

High street stores ‘at risk’

High Streets UK said 200 shops would face permanent closure as a result of the plans, and 600 would be at risk.

The group said a survey of 115 businesses operating on flagship high streets had also found 69% affected by the planned increase would seek to manage costs by reviewing staffing requirements, putting up to 5,500 jobs at risk.

Nearly two-thirds (64%) said they would consider passing on the increased tax burden to consumers through higher prices, according to the group.

About a third (34%) of affected businesses were considering reviewing their investment strategies in the UK or closing certain locations (31%) as a result.

The impact on growth

High Streets UK is calling on the government to conduct an impact assessment on the proposals, looking at how they will affect growth and investment.

The group also wants any increase to be frozen until 2027, and business rates multipliers to be fixed, rather than increasing in line with the CPI measure of inflation.

A portion of locally collected rates should also be ringfenced for investment in the corresponding flagship high street area, so those who pay the highest rates see a positive impact, according to the group.

Read more: Supermarkets already rethinking investment plans as business rates bill gets second reading

“We welcome the long-overdue review of the current business rates system,” said High Streets UK chair Dee Corsi.

“However, current proposals place too great a burden on the UK’s flagship high streets, undercutting the government’s national growth ambitions.

“Our survey of businesses up and down the country clearly shows the plans would be a disaster for jobs, investment and growth, and would ultimately lead to higher prices for consumers. We urge the government to take on board our concerns and reconsider their proposed reforms to protect flagship high streets, attract inward investment, support growth, and create a fairer system for all.”