Budget Press Releases – Perfect storm for retailers as business rates discount is reduced

Rajeev Shaunak, partner at MHA:

The UK already has higher business rates compared to most of Europe. It certainly accounts for a higher percentage of revenue for local and central government than neighbours like France, Germany, and The Netherlands.

Business rates impact particular sectors like consumer and manufacturing more than others. In the case of retailers with a bricks and mortar model already struggling against online competitors, the reduction in the business rates discount from 75% to 40% (capped at £110,000) from April 2025 will increase pressure on these retailers. Given that these businesses
by their nature employ more staff, the increase in employers NI and increase in minimum wage will only exacerbate the situation.

Combine all these factors with a possible fall in consumer confidence as many feel their disposable income has fallen (real or perceived), this may well sound the death knell for many businesses, especially smaller ones unable to weather the storm.

Not only will this impact the economy and people’s livelihoods, it also reduces consumer choice and the experience that only retailers with stores can provide and that is indeed a sad situation.

Autumn Budget 2024