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UK Budget Recasts Business Rates With Surtax on Large Properties and Slimmer Shop Relief

Ministers say the shift targets bigger occupiers to bolster smaller retailers.

Overview

  • Properties with a rateable value of £500,000 or more face a new surcharge enabled up to 20%, with the initial uplift set at about 5.8%.
  • Retail, hospitality and leisure relief is made permanent at 20% for premises up to £51,000 and 10% for £51,000 to £500,000, covering roughly 750,000 properties.
  • Supermarket groups warn the extra burden could feed through to higher food prices and leaner investment, while smaller shop groups say the support falls short of replacing pandemic-era relief.
  • The overall hit to big retailers is smaller than feared, with Sainsbury’s saying concerns were heard; analysts cite transitional relief and lower multipliers, and Ryan estimates 3,480 English retail sites will pay an extra £112m from April 2026.
  • Treasury projections show business rates receipts rising by about £2.7bn in 2029–30, even as industry bodies argue the structure still discourages larger store investment.