In the financial year 2025/26, UK retailers experienced an effective tax burden of 71.5%, the British Retail Consortium (BRC) reported. That figure tops the list of the eleven sectors examined by the organization.
A study ordered by the BRC and carried out by the consultancy Flint Global revealed that retailers contributed £39.1 billion in business taxes over the period. The levy comprises business rates, employer National Insurance, value-added tax and additional governmental charges.
Each pound of pre-tax earnings generated by retailers generated a tax charge of 72 pence. By contrast, the median effective rate across the eleven sectors stood at 50%, and the banking industry recorded a rate of 40.5%.
The hospitality field faced an effective rate of 81.6%, amounting to £22.9 billion in taxes. The BRC warned that such fiscal pressure is intensifying employment challenges, citing a loss of 122,000 retail positions from Q2 2024 to Q2 2026.
Both retail and hospitality rank among the biggest UK employers, delivering a large share of entry-level and flexible work. According to the BRC, rising staff costs after the 2024 Budget have helped drive the job reductions in these industries.
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The report calculated that combined, retail and hospitality contributed £62 billion in taxes for 2025/26, representing nearly one-third of total business-rate revenue nationwide. The BRC highlighted that main streets face heightened vulnerability to escalating taxes because of the dense clustering of these enterprises in urban centres.
Helen Dickinson, Chief Executive of the BRC, said: “For every £1 of pre-tax profit made by retail, the equivalent of 72p is now paid in business taxes. This punishing tax burden has clear consequences: job losses, shuttered shops, and a missed opportunity to drive growth in every postcode.”
Both the BRC and UKHospitality have urged the Chancellor to lessen the fiscal strain on the two sectors before the upcoming Budget, suggesting the removal of high-street retail and hospitality firms from the government’s high-value business-rates multiplier.
The British Retail Consortium together with UKHospitality are pressing the Government to implement measures that back retail and hospitality. They argue that easing the tax load would support job creation and boost economic expansion.
