Business rates cut at Harrods and other big stores

By the Editorial Team · Tuesday, June 30, 2026

The UK government’s new Budget cuts business rates for major department stores like Harrods and Selfridges while significantly increasing costs for smaller hospitality venues. This shift has sparked industry outcry over potential closures and job losses among local businesses facing a combined £318 million rise in taxes over three years.

The UK government’s recent Budget has sparked controversy over changes to business rates, with major department stores such as Harrods and Selfridges set to benefit from substantial tax reductions while smaller hospitality venues face significant increases.

The reforms, announced as part of Chancellor Rachel Reeves’ Budget, will see a decrease in the business rates multiplier for larger retail properties starting next year. This adjustment means high-end retailers like Harrods in London’s Knightsbridge are projected to see their rates bills drop by approximately £1.1 million over the next year. Similarly, Selfridges, located on Oxford Street, is expected to receive a £622,000 reduction in its business rates.

However, these cuts have drawn sharp criticism from industry representatives, particularly within the hospitality sector. Kate Nicholls, chair of UK Hospitality, described the situation as “outrageous,” highlighting the disparity between the treatment of luxury department stores and local businesses. She noted that many smaller venues, including pubs, neighborhood restaurants, and coastal hotels, will face significant increases in their rates bills.

According to analysis by tax experts Ryan, small businesses in the hospitality sector are set to collectively pay an additional £318 million in property tax over the next three years. This has raised concerns about the sustainability of many local businesses amid what industry leaders warn could lead to closures and job losses.

Pub and bar operators have voiced particular alarm, with reports indicating some establishments could see their bills rise by as much as £16,952. A letter coordinated by the British Beer and Pub Association emphasized that these increases are likely to result in “sleepless nights, pay cuts, and staff layoffs” across the sector.

Despite the backlash, Chancellor Reeves maintained that the Budget delivers “permanently lower tax rates for more than 750,000 retail, hospitality and leisure properties,” touting the changes as establishing the “lowest tax rates since 1991.”

The contrasting impacts of the new business rates policy have underscored tensions within the retail and hospitality industries, as smaller operators call for urgent government intervention to mitigate the financial pressures posed by the recent measures.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.