Chancellor Rachel Reeves has confirmed the government will push ahead with introducing a surcharge on retail property rates above £500,000.
Dubbed a ‘surtax’ by retailers, the new levy will mean that many larger commercial properties will face a higher rate on property tax, as part of a bid to help fund permanent discounts for smaller retailers, leisure and hospitality firms.
The announcement at today’s Budget will come as a blow to supermarkets, which were expecting to be made exempt from the higher level after criticism of the plans by industry leaders and warnings that it could lead to potential store closures, job losses and would also increase inflation.
The leaked Office for Budget Responsibility document stated that the Treasury said the proposed changes would include a “transitional relief package [which] will also cap increases following revaluations due in 2026”.
There will also be “extensions to measures which allow certain local authorities to retain a higher proportion of business rates revenue locally”.
The government said that together, the measures would “reduce receipts by £1.2bn on average between 2026/27 and 2028/29, but are broadly neutral by the end of the forecast as the transitional relief package and local retentions are due to expire”.
Reeves also announced that the national living wage would rise from £12.21 to £12.71 an hour from April 2026 for over-21s.
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