This article was first published in Retail Week.
Business rates might not make headlines every day, but for thousands of retailers across the UK, they’re a major cost—and a major headache. Now, the government is proposing a shake-up to the system. So what’s changing, and what could it mean for local high streets and town centres?
Business rates are a tax on all non-domestic properties, from off licences to office blocks. Whether you run a shop, café, or salon, you pay them based on your property’s rateable value —an estimate of its rental worth—multiplied by a government-set tax rate called the “multiplier.”
They’re one of the biggest fixed costs for high street businesses and they don’t flex with sales. Whether you’re business is flying high or just treading water, you must pay your business rates on time, in full. That’s why many retailers argue the system is outdated and unfair.
From April 2026, the government plans to introduce a new Retail, Hospitality and Leisure scheme with permanently lower multipliers than the standard rates for most properties.
This would be funded by an increased multiplier on all large properties (with rateable values over £500,000), whether retail or otherwise.
The aim? To ease the burden on high street businesses and, according to government to “support some of Britain’s most loved high street chains to continue to create jobs and the grow the economy.”
Why Does It Matter?
Retailers have long shouldered a disproportionate share of the business rates bill. While retail accounts for around 5% of the UK economy, retailers pay over 20% of all business rates. That’s a big imbalance that disproportionately hurts our industry.
This reform is designed to help rebalance things. Smaller shops could see real savings—money that could be reinvested in people, products, and store improvements. For struggling high streets, it could be a lifeline.
But not everyone will benefit. Under the current plans, larger shops, whether the flagship stores in city centres, or larger stores in local areas, would end up paying more.
What Could Happen Next?
There’s still a lot we don’t know. The final details will be confirmed at or around the Autumn Budget, and the impact will vary widely depending on location, property size, and business model.
But now is our collective opportunity to influence government thinking around the outcome. While welcoming plans for new permanently lower multipliers for retail properties with rateable values under £500,000, it needs to be a big enough reduction to positively affect investment decisions in high streets.
And all big shops should be excluded from the higher multiplier. Funding some of the reduction for smaller shops by increasing costs for larger shops undermines the role of larger premises in driving footfall - taxing them to support smaller stores is a false economy – if larger shops close, smaller shops suffer. It is possible for government to make this change without dipping into tax payers money.
Why It Matters to Everyone
Business rates don’t just affect retailers—they affect communities. When rates are too high, shops close. When shops close, jobs are lost and the ecosystem around them is affected leading to high streets decline. And when high streets decline, we all lose something.
This reform is a step toward modernising a system that’s long overdue for change. But it’s not a silver bullet. The real test will be whether it supports a fairer, more vibrant retail landscape—or simply shifts the burden around. So, it’s all to play for between now and October, which it’s why it’s never been more crucial to have your voice heard. Write to your MP. Tell your local newspaper. The business rates system will only get better if we speak up together.
