It would be “perverse” for business rates to rise for small shops but not others, the Federation of Independent Retailers has said.
Fed national president Hetal Patel hit out at forecasts that small shops would face higher business rates following the budget, while major supermarkets would be “relieved” at the outcome.
Property consultancy Colliers said a 5p reduction in the business rates multiplier for smaller retail, hospitality and leisure premises would for many small shops be unlikely to make up for the 40% rates relief that comes to an end at the same time next April.
Meanwhile, a 2.8p surtax on the largest properties – which is paying for the discount for smaller shops – was “not as high as feared”.
Chancellor Rachel Reeves had the option to go further with a surtax of up to 10p.
“Our view on the supermarkets is that most of them will be relieved,” said a Colliers spokesperson.
Read more: Budget 2025: how Rachel Reeves compromised on business rates
Tax firm Ryan has calculated business rates for the average small shop will rise from £5,140 to £7,313 as the 5p discount replaces 40% relief.
Patel said: “It would seem perverse if rates for many small retailers go up compared to other businesses, particularly after the government’s positive rhetoric in the run-up to the budget.”
Colliers said: “There has been concern that the 5p discount for the small RHL multiplier (now at 38.2p) is not as low as it could have been given the government guardrails allowed a 20p reduction.
“It is questionable whether this discount will be enough to counter the loss of reliefs.”
ACS CEO James Lowman said: “We called on the government to go further in reducing the new retail hospitality and leisure multipliers, and… higher business rates bills will make it harder for retailers to invest and create jobs.”
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