UK ministers weigh relaxing Sunday trading rules as retailers press on business rates

Ministers have discussed the possibility of relaxing Sunday trading rules to allow supermarkets to open for longer as a way to ease pressure on large retailers facing higher business rates, according to reports.

The conversations, first reported by trade magazine The Grocer and confirmed to have been under consideration within Labour circles, follow a growing backlash to the party’s proposed business rates reforms, which industry groups say would push up tax bills for thousands of large shops. There are no concrete plans to launch a formal review of Sunday trading laws, government sources said.

Retail trade bodies and supermarket executives have urged Chancellor Rachel Reeves to rethink the planned rates changes, telling her last week that revisiting business rates should be the top priority to stabilise the sector. The proposed reforms would recalibrate the business rates system and, according to some industry estimates, could increase liabilities for larger retail premises.

An industry source characterised the suggestion of altering Sunday trading hours as ‘‘kite flying’’ by the government and cautioned that the measure would do little to resolve the central issue. "It is vital this doesn't distract from the one single key issue, which will be making or breaking the retail industry, the reform of business rates," the source said.

Under current legislation in England and Wales, shops over a specified size face restrictions on Sunday opening hours. Proposals to relax those restrictions would require ministerial approval and potentially legislative change, and any adjustment would be aimed at allowing larger stores to capture additional weekend sales to offset rising operating costs.

Retail trade associations have repeatedly told ministers that changes to opening hours are unlikely to compensate fully for increased tax liabilities. Business rates are set on the basis of property valuations and are a significant fixed cost for brick-and-mortar retailers; industry representatives say that targeted relief or a redesign of the rates system would be more effective in safeguarding jobs and investment.

The government has not published formal analysis showing how extended Sunday trading would offset expected rates increases. Officials are understood to be weighing the political and economic implications of both measures amid growing concern about the health of the high street and food retail margins.

Labour’s business rates proposals form part of a wider review of commercial taxation intended to rebalance the system after years of valuations that industry groups and some politicians have described as out of step with seismic changes in retail and property use. Critics inside and outside Parliament have warned that abrupt increases to rates liabilities could accelerate store closures and reduce competition.

Retailers have urged a cautious, evidence-based approach. Several chains have told ministers they need clarity on timing and scale of any rates changes before they could assess operational responses such as altered opening patterns. Trade organisations have also called for transitional arrangements to avoid sudden financial shocks for large-format stores.

Any relaxation of Sunday trading laws would intersect with long-standing social and commercial debates about work patterns, local economies and consumer choice. Changes to opening hours would be monitored for effects on staffing, supply chains and small independent traders who say they could be disadvantaged by extended hours for national supermarket chains.

Ministers and Treasury officials are expected to continue discussions with industry representatives in the coming weeks. Retailers and trade bodies have made clear they want priority engagement on business rates, while suggested changes to trading hours remain an option under consideration rather than a firm policy commitment.

Officials declined to comment on internal deliberations beyond confirming that no formal review had been launched. Retailers said they would welcome a substantive reassessment of business rates and transitional measures to manage any increases in their tax bills.