Sign in Subscribe
British Retail Consortium

Britain's Supermarkets Urge Chancellor to Exempt Them from Business Rates Surtax

Strategic Insights

— 1 min read

British supermarkets, including giants like Tesco and Sainsbury's, are joining forces to press the chancellor to exempt them from a new business rates surtax. The British Retail Consortium (BRC), representing the interests of major UK supermarkets, has written a letter to Rachel Reeves, arguing that limiting the tax burden on grocers is crucial in tackling food inflation. The industry fears that inclusion in the new surtax will lead to higher prices for consumers and exacerbate the already-high food inflation, which is projected to persist into 2026.

Key Takeaways:

  • The British Retail Consortium (BRC) has written a letter to Rachel Reeves, urging the government to exempt supermarkets from the new business rates surtax.
  • The surtax is expected to cover properties with a rateable value over £500,000, which would disproportionately affect large retailers.
  • Supermarket bosses, including those from Tesco, Sainsbury's, and Waitrose, are concerned that higher taxes will make it difficult to maintain price competitiveness.
  • The industry is already facing £7 billion in additional costs in 2025, including higher national insurance contributions and new packaging taxes.
  • The BRC is asking Chancellor Rachel Reeves to address the retail industry's disproportionate tax burden to prevent higher prices for consumers.
  • Helen Dickinson, BRC's chief executive, highlights the immense financial strain on the industry, which will make it "an uphill battle" to keep food prices affordable.

Statistics:

  • £7 billion: The estimated additional costs faced by the retail industry in 2025.
  • £500,000: The rateable value threshold for properties subject to the new business rates surtax.
  • 2026: The projected year in which high food inflation is likely to persist, according to the letter.
  • 1/3: The proportion of the retail bill accounted for by large retail premises.

Sources:

  • "Lords to scrutinise government's business rates plan" - The Times, undated
  • "Government faces backlash over business rates plan" - BBC News, undated
  • Letter to Rachel Reeves from British Retail Consortium, dated undated

Read more