Marks & Spencer warns of store closures as Chancellor eyes property tax increases

British retail giant Marks & Spencer has said that it could be forced to close a number of its stores if UK Chancellor Rachel Reeves increases tax on large properties.

The department store chain is said to be leading a wider group of retailers, including Tesco, Primark and Asda, in opposing Reeves’ plan to increase property tax in her next Autumn Budget.

In evidence submitted to the Communities and Local Government secretary and seen by the Telegraph, Marks & Spencer said that if higher bills were to be imposed, 111 of its stores could be impacted and ultimately forced to close.

In a statement, the retailer commented: “Given larger retailers are often anchor tenants on the high street, taxing them to support smaller stores is a false economy – if larger shops close, smaller shops suffer.

“The proposed reforms could therefore accelerate the decline of the high street by encouraging retailers to close larger high street stores.”

As it stands, the UK government’s business rates reform, which is due to come into effect in April 2026, targets larger stores valued over 500,000 pounds, while smaller properties would have their rates reduced.

Sources for the Telegraph said that while the Treasury had not yet decided on the new rates, any surcharge on large properties would be set at the maximum.

A Treasury spokesman told the media outlet: “We are a pro-business government that is creating a fairer business rates system to protect the high street, support investment, and level the playing field.

“To deliver our manifesto pledge and provide certainty and support to the high street we intend to introduce permanently lower tax rates for retail, hospitality, and leisure properties from next year.

“Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates, supporting some of Britain’s most loved high street chains to continue to create jobs and grow the economy.”

FashionUnited has contacted Marks & Spencer with a request for more information.