Supermarket Bosses Urge Chancellor to Exempt Shops from Business Rates Surtax

Executives from Britain's largest supermarkets are urging Chancellor Rachel Reeves to exempt them from a new business rates surtax, warning that higher costs will be passed on to consumers. A letter, organized by the British Retail Consortium (BRC), has been signed by directors from Tesco, Sainsbury's, Aldi, Asda, Iceland, Lidl, Marks & Spencer, Morrisons, and Waitrose. The retailers argue that including larger shops in the surtax will exacerbate food inflation, which is expected to persist into 2026. They claim that their ability to absorb additional costs is diminishing and that households will ultimately feel the impact.

Key Takeaways:

• Supermarket bosses warn that including larger shops in the business rates surtax will exacerbate food inflation, which is expected to persist into 2026.
• The British Retail Consortium (BRC) has signed a letter to Chancellor Rachel Reeves urging her to exempt shops from the new surtax.
• The letter argues that limiting the tax burden on grocers would help tackle food inflation and that their ability to absorb additional costs is diminishing.
• Retailers cite over £7 billion in additional costs in 2025 and the strain of higher national insurance contributions and new packaging taxes.
• The industry is concerned that large shops could see their business rates rise if they are included in the government's new surtax for properties with a rateable value over £500,000.

Statistics:

• £7 billion: Additional costs faced by the retail industry in 2025 alone.
• 2026: Expected year for food inflation to persist.
• £500,000: Rateable value threshold for properties included in the government's new surtax.

Sources:

• "Letter from British Retail Consortium to Rachel Reeves" (no date provided in the original text).
• Staughton, Victoria (2023, March 9). "State of the Nation: UK high street struggles with inflation". The Grocer.
• British Retail Consortium (BRC) (2023). Business rates and retail.