"Piling taxes on over-burdened retailers" – BRC

The Budget will increase costs to the retail sector by £2.3 billion – but there's a hint on high street business rates reform in the medium term.

Head of the British Retail Consortium Helen Dickinson (pictured left) said the increase in Employer National Insurance was “yet another case of piling taxes on an already overburdened industry – a decision which will reduce investment in shops and jobs”.

The 6.7% increase in the National Minimum Wage and 6% jump in National Living Wage in April is set to add another £367m onto retail employers’ wage bill, according to the BRC.

Ms Dickenson added: “Retail employs 3m people and 2.7m more across supply chains, driving investment in jobs, communities and, ultimately, economic growth, right across the country.

“For a low margin industry, the Budget will hit hard, with the odds now stacked firmly against growth and investment in the short term. These new costs also risk increasing the prices customers pay at the till.”

Hope on business rates reform

Chancellor Rachel Reeves promised an overhaul on retail business rates to introduce permanently lower rates multipliers for high street retail, hospitality and leisure properties. However, this will not come into play from 2026-27.

The change will be funded through introducing a higher multiple on larger premises and it is thought that distribtution warehouses for the big online retailers are the target of this approach. However, the BRC warned that such a move should not penalise large retail stores which were often key to attract consumers into shopping areas.

Meanwhile, the Chancellor extended the relief scheme introduced during the pandemic, with eligible retail businesses receiving 40% rates relief – down from 75% – in the next tax year, up to a £110,000 cap.