Business Rates for Retail: How to Protect Your Bottom Line in a Changing High Street

The UK’s retail sector has never stood still, but recent years have brought disruption at an unprecedented scale. From the accelerated shift to e-commerce to the impact of rising wages, inflation, and supply chain pressures, retailers have had to adapt quickly just to survive. But one major cost is often overlooked or misunderstood, even though it’s typically the third largest overhead after rent and wages. That’s right: business rates. As we head towards the 2026 revaluation and a more complex five-tier multiplier system, retail occupiers must treat business rates as a strategic issue — not just a fixed line on the budget. If ignored, business rates can quietly drain profits. If managed proactively, they offer one of the few opportunities for real savings in a high-pressure market. Why Retailers Are Feeling the Pinch in 2025 The government’s reform agenda is already reshaping the retail cost base:

• Relief Reduction: The Retail, Hospitality and Leisure (RHL) Relief has dropped from 75% to 40% this year,  and is set to be phased out entirely by April 2026.
• New Multiplier Bands: The old two-tier system is being replaced by five new categories, adding complexity when retailers need simplicity.
• Revaluation Ahead: We’re over two years into the 2023 Rating List, but the 2026 list, based on April 2024 values, is already on the horizon. Many stores, especially those that bounced back post-COVID, are facing potential increases.

5 Common Mistakes Retailers Make with Business Rates

1. Assuming the bill is correct Many retailers believe business rates are a fixed cost with no room for negotiation. But rating assessments are complex, and mistakes or misclassifications are common.
2. Missing the deadline to appeal You can challenge your current rateable value (RV), but only up until 31 March 2026. Miss the deadline, and you could lose three years’ worth of savings.
3. Not claiming eligible reliefs From transitional relief to small business relief, many opportunities go unclaimed simply because retailers don’t know they exist or think they don’t apply.
4. Forgetting about changes in use or layout Has your store been refurbished, sublet, or partially vacated? These physical changes can affect your rateable value, but unless you act, your rates might not reflect them.
5. Failing to audit past payments A business rates audit can reveal past overpayments, misapplied reliefs or errors made by local authorities. These can often be reclaimed, with interest.

What Retailers Can Do Now

1. Book a business rates audit An audit doesn’t just check your current rates, it can unlock historical errors and savings across your property portfolio.
2. Review all reliefs and exemptions Especially as the RHL relief winds down, it’s crucial to identify any other available offsets.
3. Appeal your assessment if appropriate If your rateable value doesn’t reflect current trading conditions or the physical reality of your space, a formal challenge could significantly reduce your liability.
4. Seek specialist advice Business rates legislation is complex and constantly evolving. At Dunlop Heywood, we help retailers navigate this complexity — and turn it into opportunity.

The Bottom Line on Your Bottom Line Retailers already face enough uncertainty, but business rates don’t have to be one of them. By taking control now, reviewing assessments, and exploring your options, you can protect your bottom line well into 2026 and beyond. Whether you’re a national chain or an independent store, the opportunity to save is real, but the window is closing. Let’s make sure your business isn’t paying more than it should.