The British Retail Consortium is seeking business rates changes ahead of the UK Budget, warning that the tax burden is putting pressure on retail jobs, investment and prices.

UK retailers paid business taxes equivalent to 72p for every £1 of pre-tax profit in 2025/26, according to analysis by the British Retail Consortium (BRC).

The comparison covered 11 major economic sectors, with an average of 50p per £1 of pre-tax profit. Hospitality recorded a higher figure of 82p.

The BRC said the tax burden was putting pressure on retail employment and investment while adding to pressure on consumer prices. Its comparison covers multiple taxes and does not represent a corporation tax rate.

Business rates reform in focus

The BRC and UKHospitality are calling for high-street retail and hospitality businesses to be excluded from the business rates high-value multiplier ahead of the UK Budget.

Business rates are a tax on commercial property. In England, bills are calculated by applying a multiplier to a property's rateable value, with reliefs and other adjustments taken into account.

For 2026/27, qualifying retail, hospitality and leisure properties with rateable values below £51,000 have a multiplier of 38.2p. Properties valued at £51,000 to £499,999 have a 43p multiplier.

Properties with rateable values of £500,000 or more are subject to the 50.8p high-value multiplier. These arrangements apply to England; business rates are devolved and the systems differ elsewhere in the UK.

The BRC and UKHospitality want qualifying high-street retail and hospitality properties above the £500,000 threshold removed from the high-value multiplier.

Employment and investment concerns

The BRC reported that retail employment had fallen by 122,000 over two years, which it linked to higher employment costs following the 2024 Budget.

BRC chief executive Helen Dickinson said the tax burden was contributing to “job losses, shuttered shops, and a missed opportunity to drive growth”. She called for a clear path to reducing the business rates burden.

For retailers with UK operations, the debate has implications for store costs, staffing and investment. The effect of any changes will vary according to property valuations, available reliefs and the composition of individual store portfolios.

The UK Budget will therefore be closely watched by retailers with significant high-street and town-centre operations.