Supermarkets and shops hit hardest by business rates shake-up – research

Changes to property taxes designed to “level the tax playing field” between high street and online retailers will hit shops including supermarkets and department stores hardest, according to new analysis.

Research by global tax services firm Ryan found the changes to business rates coming into force next year will hit thousands of physical stores with major bill increases.

Experts have said the “policy risks penalising the very businesses that anchor the high street”.

From April 2026, the Treasury will introduce a new business rates surcharge of up to 10p on properties with a rateable value (RV) of £500,000 or more.

It has previously said the surcharge is designed to permanently fund reduced levels of the commercial property tax for smaller retail, leisure, and hospitality premises.

The Government said that the measures launched at the previous autumn budget were intended “to level the playing field for the high street”.

Analysis of official Government data by Ryan found that retail, leisure and hospitality businesses are likely to face up to £482 million a year in extra business rates on just their physical premises alone.

The data shows that warehouses and distribution operators will face a smaller hit of about £262 million.

Meanwhile, almost three times as many retail, hospitality and leisure properties – 4,353 – could be impacted compared to 1,589 large distribution warehouses.

The research indicated that more than 1,803 large supermarkets would see rate increases.

Meanwhile, there would be an increase of about £75 million across 650 UK hospitality businesses, with an increase of up to £48.5 million across 429 leisure properties.

Alex Probyn, practice leader for property tax at Ryan, said: “The bluntness of this policy is stark.

“Only 129 properties are pure online retailers, yet thousands of supermarkets, department stores and out-of-town chains — plus the HQs and distribution centres that support them — will be dragged into this new tax.

“Instead of targeting the online operators it was designed to address, the policy risks penalising the very businesses that anchor the high street and provide mass employment.”