High Streets are paying over a third of all business rates in the UK despite only accounting for nine per cent of the economy, according to new research.

Analysis from the British Retail Consortium (BRC) and UKHospitality found that in 2023/2024 retail and hospitality businesses paid nearly £9 billion in business rates, or 34 per cent of the overall rates bill.

Retailers and hospitality companies are expected to pay even more after business rates relief ends on 31 March next year.

The BRC warned that this would cost the sectors a combined £2.5 billion, taking the overall bill up to £11 billion, or 44 per cent of the total rates bill.

The trade association said that all other UK industries, including manufacturing, construction, transport and storage, accommodation and food, info and communications, finance and insurance, science and tech, admin and support, art and entertainment, and wholesale, are currently paying much less in business rates than the retail sector.

Figures from the organisation show that the UK has lost 6,000 shops in the last five years, with two-thirds of these closures in part driven by concerns over business rates.

It has warned that without action, up to 17,300 further shops could close over the next decade.

Both the BRC and UKHospitality are calling for chancellor Rachel Reeves to put forward what they describe as a "fairer level of business rates" for retail and hospitality in the upcoming Autumn Budget, which is being published next Wednesday 30 October.

The organisations say that a replacement of the current business rates system, which was a pledge from Labour ahead of the general election, would "rebalance" a system that "unfairly punishes" UK High Streets and town centres.

In its manifesto Labour said that a new system in England would help to “level the playing field between the High Street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship”.

“Already, the industry pays far more than its fair share – retail accounts for 5 per cent of the economy, but pays 7.4 per cent of all business taxes, and over 20 per cent of all business rates," said Helen Dickinson, chief executive, BRC. "The Budget is a great opportunity to right this imbalance, ensuring that retail pays a fairer level of business rates.”

Dickinson says that the current system is the "biggest barrier" to local investment in the sector.

Kate Nicholls, chief executive of UKHospitality, said: "High Street businesses paying one third of all business rates is absurd and one of the primary reasons why we see our businesses facing financial challenges – it makes running a pub, bar, café or restaurant, to name a few, incredibly expensive."

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