Budget 2025 – Key Retail Announcements
- British Retail Consortium
- 4 hours ago
- 4 min read
It’s been a long journey to today, with an extended BRC campaign that included extensive engagement with Ministers, MPs and wide-ranging media and broadcast coverage.
While she namechecked the BRC in her speech, the Chancellor presented a Budget that was a mixed bag for retail. While some shops will receive new support, costs have been brought in for others. The announced permanent reduction in retail business rates is an important step to reduce the industry’s burden. However, the decision to include larger retail premises in the new rates surtax does little to support retail investment and job creation. The welcome plan to scrap the damaging de minimis loophole was weakened by a 2029 deadline. And while increases in the headline rate of the National Living Wage were in line with expectations, the rise in the minimum wage for Under-21s could limit employment opportunities. Inevitably, the winners and losers across retail will become clearer as you consider the detailed impact in the coming days.
Priority Retail Issues:
On Business Rates:
From 1 April 2026, bills in England will reflect changes in property values since the 2023 revaluation (the new rating list is here). The small business multiplier will fall from 49.9p in 2025-26 to 43.2p in 2026-27, and the standard multiplier from 55.5p to 48p.
A £4.3 billion package over the next three years will provide support for properties that will see increases in their new bills.
From 1 April 2026, government is introducing two new permanently lower business rates multipliers for eligible Retail, Hospitality and Leisure (RHL) properties with rateable values below ￡500,000. These will be 5p lower than the national multipliers, making the small business RHL multiplier 38.2p in 2026-27 and the standard RHL multiplier 43p in 2026-27 (ie retail properties between £51k - £500k rateable values).
From 1 April 2026, there will be a new high-value business rates multiplier for all properties with rateable values above￡500,000 of 2.8p above the standard multiplier ie 50.8p in 2026-27.
In our response we said:
“This Budget offered much-needed relief for some retailers, but fell short of the bold action needed to secure the long-term future of our high streets. While the announced changes to business rates are a step in the right direction, many felt the Chancellor should have gone further. The 5p rates reduction for retail, hospitality and leisure properties with a rateable value below £500,000 is unlikely to fully fix the situation where retail, as 5% of the economy, pays over 20% of all business rates. Including supermarkets and anchor stores in the new surtax is a retrograde step that does little to mitigate the rising cost of food and essentials. Larger stores, which already pay one third of the industry’s business rates bill and employ around a million people, should have been exempted from a surtax intended to fund support for the high street.”
On the National Living Wage (NLW):
From April 2026, NLW will increase by 4.1% to £12.71 per hour. NLW for 18-20 year olds will increase by 8.5% to £10.85 per hour and for 16-17 year olds and apprentices by 6.0% to £8.00 per hour.
In our response we said:
“The NLW uplift announced by the Chancellor was in line with the core expectations announced by the Low Pay Commission, providing stability for retailers’ financial planning.
“The higher increases for under 21s, when coupled with concerns of retailers about the implications of some provisions in the Employment Rights Bill, will do little to encourage the employment prospects of younger people.”
On Salary Sacrifice:
The Government will charge employer and employee NICs on pension contributions above £2,000 per annum made via salary sacrifice. This will take effect from 6 April 2029.
In our response we said:
“Changes to salary sacrifice will hurt retail employees and businesses alike. For many retail colleagues, this will act as a brake on their pension savings. For retailers, these changes will cost hundreds of millions, punishing those businesses with strong pension offerings, and/or forcing them to reduce the contributions they make to their employees’ retirement security.”
On Low Value Imports:
Removing customs duty relief on goods imported into the UK valued at £135 or less, making them subject to customs duty from March 2029 at the latest, and consulting on implementing a new set of customs arrangements for these goods.
In our response we said:
“While we welcome the decision by the Chancellor to close the de minimis loophole, the proposed timeframe is simply too long. There are 1.6m parcels arriving in the UK every day, double what they were last year, and businesses cannot afford any delay on scrapping the existing rules.”
Wider Retail Related Issues:
Join one of our upcoming member calls where we will look at the Budget in more detail, the implications for retail and hear your views:
Upcoming Member Meetings:
We will continue to look at the detail over the coming days – please do get in touch with your view or if you identify additional issues which you think we should look at.
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