Business Rates Hike Could Threaten Hundreds of UK Retailers, Putting 100,000 Jobs at Risk

Published: 12 September 2025 | English Chronicle Desk

UK retailers have issued a stark warning that proposed increases in business rates could put up to 400 major stores at risk of closure, potentially endangering as many as 100,000 jobs. The warning comes ahead of the Labour government’s autumn budget, which is considering higher property tax charges on large retail premises, including supermarkets, department stores, and other high-value sites.

The government’s proposals are intended to fund discounts for smaller properties such as independent retailers, cafes, and pubs, reflecting a pledge to make the business rates system fairer. However, industry leaders fear the unintended consequence of burdening larger retailers could destabilize high streets and shopping centres.

Senior executives from John Lewis, Lidl, and B&Q reportedly met with Chancellor Rachel Reeves last week, urging the government to exclude large retail stores from the proposed surcharge. The British Retail Consortium (BRC), representing most major retail groups, estimates that up to 4,000 outlets could be affected by the proposed rate changes. Using historical data to model the likely impact, the BRC concluded that 400 of these large stores might be forced to close, with retailers potentially resorting to price increases or job cuts to maintain profitability.

Helen Dickinson, chief executive of the BRC, emphasized the wider economic impact, stating, “Britain’s largest shops are magnets, pulling people into high streets, shopping centres, and retail parks, supporting thousands of surrounding cafes, restaurants, and smaller and independent shops. After years of rising costs, far too many stores have disappeared—leaving behind empty shells that once thrived at the heart of our communities.”

The government has acknowledged concerns about the “cliff edges” in the business rates system, where small expansions in property value can trigger disproportionate tax increases. Chancellor Reeves highlighted the need for reform, writing to ministers, “We want to see thriving high streets and small businesses investing in their future, not held back by outdated rules or strangled by red tape. Our economy isn’t broken, but it does feel stuck. That’s why growth is our number one mission.”

An interim government report on business rate reforms, published on Thursday, outlined proposals to improve calculations and offer greater support for investment in commercial premises. The plan aims to create a more balanced system that rewards growth without penalizing expansion.

Kate Nicholls, chair of UKHospitality, representing thousands of restaurants, pubs, and cafes, welcomed the proposals, stating, “For too long, the broken business rates system has unfairly punished hospitality businesses, and I’m pleased that the government is taking action to reform it. These measures to remove punitive cliff-edges and barriers to investment are positive and will help to rebalance the system, as will the government’s commitment to lower business rates bills for hospitality businesses.”

As policymakers prepare for the upcoming budget, the challenge will be balancing support for smaller businesses while ensuring that vital anchor retailers on high streets and in shopping centres remain viable. The outcome of these reforms will be closely watched by the retail sector, which continues to face a complex mix of rising costs, changing consumer habits, and pressures from both domestic and international competition.