Government plans to raise business rates to cost ‘600 shops and 5,500 jobs’

The message to government came in a letter from a High Streets UK, a group representing 5,000 high street businesses, which is also doubled down on warnings that raising business rates will increase prices for consumers.

The group said that 200 shops would face permanent closures as a result of the plans, while another 600 could be at risk.

In a survey of 115 businesses operating in flagship high streets, the group found that 69% of those affected would seek to manage costs by reviewing staffing requirements.

Nearly two-thirds said they would also consider passing on the increased tax burden to consumers through price rises, while nearly a third said they would consider reviewing their investment strategies in the UK or closing locations (31%) as a result.

Under proposals unveiled by Labour at the now infamous Budget, properties with a rateable value of more than £500,000 will pay more business rates from April 2026, in order to fund a cut for smaller retail, hospitality and leisure properties with rateable values below £500,000.

The level of the new rates is due to be set in this year’s autumn Budget.

High Streets UK is calling on government to conduct impact assessments of the proposals, to analyse how they will affect growth and investment. They also want any increase to be frozen until 2027, and for the business rates multipliers to be fixed rather than increased in line with CPI inflation.

“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.”