The UK’s high streets are in crisis. And it’s not just the competition from out of town shopping parks, online sites and poor parking and transport in town centres. They’re tough enough obstacles; the big-one is the local authorities themselves. Business rates are driving businesses out of business. And the ironic twist is that without those businesses, local authorities would have little income. The size and scale of that contribution was highlighted in a report this week.

British retailers and hospitality venues collectively pay a third of all business rates in the UK, despite only accounting for 9 per cent of the economy. 

Data compiled by trade associations the British Retail Consortium and UKHospitality showed that in the tax year ending April 2024, retail and hospitality business paid nearly £9bn in rates, representing 34 per cent of the overall rates bill. This figure vastly out of whack with the revenue generated by the two sectors, which combined amounts to just under a tenth of UK economic activity. 

Meanwhile, as per the new budget from the Treasury, business rates relief for retail and hospitality is set to come to an end on March 31, which will add an additional £2.5bn to their combined rates bill. At this level, the two sectors will be contributing a full 44 per cent of UK business rates. 

“Consumers want diverse and thriving high streets, but this is held back by the broken business rates system,” said BRC chief executive Helen Dickinson. “It is the biggest barrier to local investment and prevents the creation of new shops and jobs.”

“Hospitality is at the heart of our communities but the enormous value it delivers both socially and economically is under threat from the inflated business rates bill the sector has to foot,” added UK Hospitality head Kate Nicholls. “High street businesses paying one third of all business rates is absurd and one of the primary reasons why we see our businesses facing financial challenges –  it makes running a pub, bar, café or restaurant, to name a few, incredibly expensive.”