King’s Speech Must Fix Broken Business Rates

The BCC is calling on the Government to grab the chance to fix the UK’s broken business rates system in its legislative agenda for the King’s Speech. 

• Two fifths of firms (41%) are now worried about their business rates, up from 34% at the end of last year (Q4 2025). 
• Concern is highest in the hospitality (65%) and retail (55%) sectors with manufacturing (48%) and logistics (48%) close behind. 
• The BCC’s research, conducted before the impact of the Iran War, shows half of all firms (49%) plan to put up prices due to rising costs. 

It is raising the alarm as anxiety about business rates rose to 41% in its Quarterly Economic Survey (QES) for Q1 2026.

This is the highest level since the BCC started asking the question in the Q2 QES of 2017, the lowest level was 22% in Q2 2022.
 
Companies cite cost pressure from business rates as a key reason for increasing prices and delaying expansion of their premises. 
 
While the Government made some concessions on business rates for pubs and live music venues earlier this year, BCC research shows the worry being felt goes much wider. 
 
The hospitality, retail, manufacturing and logistics sector face the highest levels of concern, but business size is also a factor, with anxiety over rates highest for firms with 10 to 49 employees (51%). 
  
In a BCC survey from February 2025, 23% of respondents said that business rates had a direct impact on their prices.  

Kate Shoesmith, Director of Policy and Insights at the BCC, said: 

“Reforming business rates was a key manifesto pledge of the government, but it has only tinkered around the edges.

“Yet our research shows the alarm bells were ringing more loudly even before cost pressures went into overdrive due to the Middle East conflict.

“But business rates are a factor which the government has full control over and there are steps it can take to change the way the system works, without damaging the revenue raised.
 
“The government must deliver the more ambitious root and branch reform of the whole system that it promised. 

“As first steps, it should mitigate the steep jumps in bills across all sectors caused by the 2026 revaluation and introduce a single flat rate multiplier.

“This shift should then jumpstart a more rigorous consultation with business on how to fully reform what is a complex and rigid system.

“They are ready to contribute innovative thinking on change without costing the Exchequer. There are other tax mechanisms that can meet the goal of widening the tax base to allow for a lower multiplier.”

Read more latest news from the BCC here.

07.05.2026