Chancellor could raise business rates for department stores and supermarkets in next Budget

Around 17,000 retailers and businesses such as breweries, hotels, restaurants and other leisure operators could be hit with taxes equating to £1.7bn, according to The Telegraph.

The newspaper also reports that retailers such as Marks & Spencer, Asda, Primark, Tesco, Sainsbury’s, Morrisons and Kingfisher are speaking out against the proposed hike.

Reports said M&S has estimated 111 of its stores could potentially close if higher bills come into play.

In evidence given to deputy prime minister Angela Rayner’s department, M&S said: “Given larger retailers are often anchor tenants on the high street, taxing them to support smaller stores is a false economy − if larger shops close, smaller shops suffer.

“The proposed reforms could therefore accelerate the decline of the high street by encouraging retailers to close larger high street stores.”

The unwelcome plans follow last year’s Budget, which saw the chancellor increase national insurance contributions from employers.

Such policies meant UK retailers are facing £7bn in additional costs in 2025, according to the BRC.

Colliers head of business rates John Webber told The Telegraph: “It beggars belief how the government’s plans will help if they lead to reduced investment and expansion or even employment opportunities in these bigger high street stores.”

A Treasury spokesman said: “To deliver our manifesto pledge and provide certainty and support to the high street, we intend to introduce permanently lower tax rates for retail, hospitality and leisure properties from next year. 

“Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates, supporting some of Britain’s most loved high street chains to continue to create jobs and grow the economy.”