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Retail bosses have warned that the introduction of a surtax on large stores could lead to higher prices for shoppers.
Henry Saker-ClarkTuesday 25 November 2025 15:43 GMT
(Alamy/PA)
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Supermarkets are set to face a jump in business rates payments at the Budget following a reported Treasury U-turn, with retail bosses warning the move could lead to higher prices for shoppers.
The caution comes amid a backdrop of cost hikes for the sector earlier this year and elevated food inflation for UK shoppers.
The Government is planning to introduce a new business rates “surtax”, which will mean many larger commercial properties will face a higher rate of the property tax in order to help fund a permanent discount for smaller retailer, leisure and hospitality firms.
The higher tax level is set to be applied to commercial properties with a rateable value above £500,000, although the extent of any increases have not been announced.
Last month, it was widely reported that supermarkets were expecting to be made exempt from the higher level after criticism from industry bosses.
Marks & Spencer had said proposals for the surtax would be “encouraging retailers to close larger high street stores”.
However, the Financial Times reported that the Treasury has now indicated that big supermarkets will be hit by the tax change at the Budget announcement on Wednesday.
Helen Dickinson, chief executive at the BRC, said: “Retail is 5% of the economy, but pays over 20% of all business rates.
“The Chancellor promised that these reforms would rebalance business rates across the economy to support our high streets.
“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 Treasury has been contacted for comment.
