Independent retailers to see rates bills soar by up to 15% despite government's "transformation" promises

Independent retailers across the UK are facing business rates increases of up to 15% next year despite government promises of the "lowest tax rates since 1991", Bira has warned.

Bira said the reality of last week's Budget has fallen far short of the "transformation" pledged by ministers, with most independent shops set to pay considerably more in rates despite new lower multipliers.

Andrew Goodacre, CEO of Bira, said the government had used the rates revaluation to mask what amounts to "tinkering around the edges" rather than genuine reform.

The original government proposals suggested multiplier reductions of up to 20p for properties with rateable values below £51,000 and up to 10p for those above that threshold. However, the actual reduction delivered was just 5p.

Bira analysis shows that a typical independent shop with a rateable value rising from £30,000 to £39,000 will see its bill increase from £8,982 to £10,329 - a jump of £1,347 or 15% - despite being eligible for the new "permanently lower" small business multiplier of 38.2p and transitional relief.

An even smaller shop with rateable values rising from £15,000 to £20,000 will face the minimum £800 cap increase, taking bills from £4,491 to £5,291.

"The fact that these complex transitional reliefs are even needed shows that business rates still requires wholesale reform," said Mr Goodacre. "The government took advantage of the rates reassessment to deliver minimal real support while claiming to have transformed the system."

Bira has contacted the Treasury with real examples demonstrating how the new system penalises independent shops while many very large stores will pay less than before.

"There are serious questions for the Valuation Office about how shops on the high street see their valuations soar while superstores on retail parks get lower valuations," said Mr Goodacre. "It doesn't make sense and frankly feels like a betrayal of the government's stated aim to support the high street."

The rates increases come alongside rising labour costs, with the National Living Wage increasing to £12.71 from April, and a four-year wait until the low-value import duty loophole closes in 2029.

"Independent retailers are facing a perfect storm," said Mr Goodacre. "Higher wage bills, business rates going up not down despite the promises, and another four years of being undercut by overseas sellers dodging duties and safety standards. This Budget was supposed to level the playing field. Instead, it's made the pitch even more tilted against honest businesses on our high streets."

Bira is calling on the government to explain how the new system supports independent retailers when most will see significant bill increases, and to bring forward the closure of the import duty loophole.

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