Co-op Wholesale has added its weight to calls for small shops to be given the maximum business rates discount possible in the Autumn Budget.
The wholesaler’s call was backed by retail partners who warned jobs and businesses were under threat.
Jack Matthews, fifth-generation owner of Bradley’s Supermarket Nisa Local in Leicester, said the business would “have to make tough choices around staffing and investment” without maximum rates support.
Benedict Selvaratam, owner of Freshfields Market in Croydon, said business rates were “breaking the high street”.
“This isn’t a marginal cost. It’s a massive, structural hit. It changes how you think about hiring, investing, and even surviving,” Selvaratam said. “Unless there’s meaningful reform, we’ll keep losing independent retailers.”
It follows a similar call from Co-op for Rachel Reeves to make full use of new powers to cut business rates for small shops from 2026. The retailer last week warned 60,000 small shops faced a risk of closure unless the Chancellor announces a promised business rates discount in full in the budget on 26 November.
Legislation passed earlier this year enables Reeves to raise the rate of tax for all large business properties in order fund a discount for smaller retail, hospitality and leisure (RHL) premises.
New guidance
Guidance published by the Treasury today confirmed there would be two lower business rates multipliers for smaller RHL properties. One is the small business RHL multiplier, applying to the smallest properties, with a rateable value under £51,000. The other is the standard RHL multiplier, applying to properties with a rateable value of between £51,000 and £499,999.
The plans were first announced last year but the tax rates themselves are still to be set in this year’s budget.
The two new RHL multipliers are to replace RHL business rates relief, which was introduced in response to the pandemic and stands at 40%, with a cap of £110,000 per business.
All business properties with rateable value of £500,000 or more face a new, higher multiplier, including thousands of large retail stores.
The legislation enables Reeves to cut up to 20p from the two RHL multipliers for smaller stores, and add up to 10p to the multiplier for all larger business properties, in a revenue-neutral plan.
Pressure on Reeves
However, Reeves is also under pressure to exempt all large stores from the higher tax rate. Union Usdaw today became the latest body to make the demand.
“The government has detailed plans to support retail through a new permanent business rates reduction, which Usdaw welcomes,” said Usdaw general secretary Joanne Thomas.
“However, we share the grave concerns of retailers about how the introduction of the higher multiplier for larger stores will impact the wider retail sector. It is deeply concerning that the BRC has forecast 400 large-format stores are at risk of closure if they are subjected to the proposed higher multiplier.”
Reports earlier this month suggested Reeves was preparing to bow to pressure to exempt all shops from the higher rate.
The BRC has claimed the Treasury can still fund the discount for smaller RHL properties, and keep the plans revenue-neutral, if it introduces a bigger surtax for the largest properties in sectors other than retail.
Alex Probyn, leader for Europe & Asia-Pacific property tax at global tax firm Ryan said: “Many will now be anxiously waiting to see whether their larger stores and venues over £500,000 in rateable value, which are excluded from the lower tax rates, will attract the new supplement to standard rates.
“Across the retail, hospitality and leisure sectors, up to 4,353 premises could be caught by the supplement – facing an estimated £482m a year extra in business rates.”
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