The UK Treasury has reversed course on a planned business rates reform, leaving large supermarkets facing higher tax bills that industry leaders warn could push up prices for shoppers. The government U-turn comes ahead of Wednesday's Budget announcement and marks a shift from earlier signals that big retailers might be spared.
The government plans to introduce a business rates "surtax" on commercial properties with a rateable value above £500,000. The higher tax rate will help fund permanent discounts for smaller retailers, leisure and hospitality businesses. The extent of the tax increases has not yet been announced.
Last month, supermarkets widely expected exemption from the surtax after criticism from industry bosses. Marks & Spencer had warned the proposals would be «encouraging retailers to close larger high street stores». However, the Financial Times has now reported the Treasury will impose the tax on large supermarkets after all.
Industry Warnings
Helen Dickinson, chief executive of the British Retail Consortium, sharply criticized the move. «Retail is 5% of the economy, but pays over 20% of all business rates», she said.
Dickinson pointed to broken promises: «The Chancellor promised that these reforms would rebalance business rates across the economy to support our high streets.» She warned of severe consequences: «If she chooses to land large retailers with an even bigger burden, now and in the future, it will be our high streets that suffer, with fewer jobs, less investment, and higher prices for customers.»
The warnings come as the retail sector already faces cost pressures from earlier this year and elevated food inflation continues to squeeze UK shoppers. The Treasury has been contacted for comment.
Note: This article was created with Artificial Intelligence (AI).
