CoStar quotes Cara Imbrailo on the UK government's plans to exclude large retailers from the top bracket of business rates

Chancellor of the Exchequer Rachel Reeves has announced plans to exclude supermarkets and large retailers from paying the top band of business rates, after warnings that proposals will spark higher food inflation.

Both CoStar and the Financial Times report that large retail premises will be removed from the highest bracket of the property levy following strong lobbying from the industry. 

The government announced in September it would introduce permanently lower multipliers for retail, hospitality and leisure businesses that have a rateable value of under £500,000 from April 2026-27 and fund this with a higher multiplier on properties with a value of over £500,000. It has said the rates for the new multipliers will be announced at Budget 2025, taking account of the revaluation due in 2026, as well as the economic and fiscal context.

Cara Imbrailo, Partner in our Real Estate team, comments for CoStar:

The Treasury’s move to exempt larger shops from the top rate of business rates will be a welcome relief and follows industry warnings that higher rates could otherwise have triggered widespread store closures, job losses and further risks of food inflation.

"It remains to be seen whether all shops will benefit, or whether physical store size will be a deciding factor, but this is a positive step that shows government has listened to industry concerns.

"Physical retail plays a vital role in sustaining healthy communities, providing essential goods and services, creating jobs, supporting local economies and fostering social interaction. With many retailers already operating on tight margins, continued government support will be key to ensuring high streets remain vibrant and resilient.

Read the full article in CoStar here (subscription required).