Retail leaders warn against business rates ‘surtax’ on larger Welsh stores
Retail leaders warn against business rates ‘surtax’ on larger Welsh stores
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The Welsh Retail Consortium (WRC) has warned that proposed changes to Wales’ business rates could risk penalising medium and large retailers, potentially undermining high streets and local economies.
The WRC’s comments come as the Welsh Government’s consultation on ‘Proposals for non-domestic rates differential multipliers’ closes today. The plan includes a permanent reduction in business rates for smaller shops, but would also introduce a higher rate – or ‘surtax’ – for bigger premises.
Retailers account for more than a fifth of the total business rates paid in Wales, with rates currently the highest in Great Britain. The WRC says the proposed reforms, due to take effect next spring, would unfairly shift the burden rather than fix the system.
In its submission, the WRC welcomed the Welsh Government’s recognition of the disproportionate impact of business rates on the retail sector, as well as its proposal to permanently reduce rates for smaller stores. However, it argued that the reduction should apply to all shops, regardless of size.
The consortium opposes the idea of imposing higher charges on medium-sized and large retailers, warning that the move would discourage investment at a time when shopper footfall and retail sales remain weak, and statutory costs are rising following the last UK Budget.
Sara Jones, Head of the Welsh Retail Consortium, said: “Retailers have long borne the brunt of Wales’ outdated business rates system, so we welcome the Welsh Government’s promise to finally confront this issue. But let’s be clear: shifting the burden from one group of shops to another isn’t reform—it’s a reshuffle. Business rates in Wales are already at a 26-year high and the steepest in Great Britain. With retailers footing a fifth of the total bill, the strain is unsustainable. In April 2025 alone, UK retailers were hit with £2.3 billion in extra costs as a result of the UK Budget – £115 million of that here in Wales.
“A permanent cut to rates for the smallest shops is a step in the right direction, but real change means not leaving medium and larger retailers behind. These stores are the heartbeat of our high streets—drawing shopper footfall, creating jobs, and anchoring communities. Penalising them with a surtax would be a serious misstep. We need a system that rewards investment, not punishes scale. No store should pay more. Wales deserves a fairer, smarter approach—one that strengthens local economies instead of pushing businesses to invest across the border rather than here in Wales.”
The WRC’s intervention adds to a long-running debate over the future of business rates in Wales, with calls from across the retail industry for reforms that encourage growth and keep more investment within the country.
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