Independent retailers across the UK are facing significant business rates increases next year, with some estimates suggesting rises of up to 15%, despite government assurances of lower tax rates.

Retailers say the latest Budget falls short of promised reforms, leaving many small shops under financial pressure.

Government reforms fall short for high street shops

The British Independent Retailers Association (Bira) has criticised the government for offering only minimal reductions in business rates multipliers.

While ministers promised the "lowest tax rates since 1991" and a transformed system, most independent retailers will see bills rise, not fall. Typical rateable value increases mean a shop currently paying £8,982 could face a £10,329 bill next year, a 15% rise, even after transitional relief.

Andrew Goodacre, Bira’s CEO, described the measures as “tinkering around the edges” rather than meaningful reform.

He highlighted that smaller shops will continue to pay more while some large retail outlets benefit from lower valuations, raising concerns over fairness for high street traders.

Rising costs compound pressures on small retailers

The increase in business rates comes alongside other financial challenges. Wage costs are rising, with the National Living Wage set to increase to £12.71 from April 2026.

Independent shops are also affected by a low-value import duty loophole, which allows overseas competitors to undercut prices until its planned closure in 2029.

Bira warns that these factors combine to create a “perfect storm” for small retailers, making it harder for them to compete against larger domestic and international retailers.

The association has called for urgent government action to support independent businesses and level the playing field.

Calls for transparency and faster reform

Retailers and Bira are pressing the Treasury and the Valuation Office to provide clarity on how rates are assessed, particularly why high street shops face large increases while some retail parks see reductions.

The organisation urges policymakers to accelerate reform of the business rates system and close loopholes that disadvantage smaller traders.

“Independent retailers need a system that genuinely supports the high street,” said Goodacre. “Without further action, many shops will continue to struggle under rising costs and unfair competition.”