Major UK Retailers Warn of Store Closures as Business Rates Set to Rise Dramatically

Hundreds of the United Kingdom’s largest retail stores may be at risk of closing their doors under proposed government changes to business rates, the British Retail Consortium has cautioned. The government is considering a new policy that would see big retailers subsidising reduced business rates for smaller companies by introducing a higher band of tax for properties with a rateable value over £500000.

Industry leaders argue that these large stores already shoulder a significant portion of the sector’s tax burden—about a third of the total business rates bill. Imposing further costs could squeeze already tight profit margins, resulting in increased prices for consumers, job losses or potential store closures. The British Retail Consortium estimates that up to 400 major retail outlets are now facing possible closure if the higher tax band is implemented.

This warning comes in the context of ongoing pressures for high street retailers, including escalating employment costs, heavy taxation, and ever-rising rates bills. Data from the consortium reveal that 1000 large stores have been lost in the last five years. Should the predicted 400 additional closures materialise, the impact could see up to 100000 jobs lost and local councils deprived of business rates receipts exceeding £100 million annually.

Helen Dickinson, Chief Executive of the British Retail Consortium, highlighted that these large stores act as anchors for high streets, shopping centres and retail parks, driving footfall for smaller surrounding businesses. She warned that further closures would leave more empty buildings at the heart of communities, resulting in job losses and a sharp decline in exchequer revenues.

Conversely, the Federation of Small Businesses takes a different view, with Executive Director Craig Beaumont arguing that businesses with the broadest shoulders should contribute more, especially when small businesses face even more acute pressures. Current government proposals aim to support smaller firms with permanently lower business rates, while reforming the system to avoid abrupt tax jumps that hinder investment and growth.

Business rates remain a heavily debated topic, with critics labelling the system outdated, particularly as it penalises firms with a physical high street presence in favour of online or out-of-town operators. Retail contributes 5 per cent of the UK’s economy yet pays more than 20 per cent of business rates, underlining the sector’s disproportionate tax load. All eyes now turn to the government’s budget announcement in November, when further details of the reforms are expected to be unveiled.