M&S has warned that it could be forced to close several of its stores as Chancellor Rachel Reeves plans to increase business rates on larger properties.

Reeves will use her next Budget in the Autumn to increase property taxes for department stores and supermarkets.

The government’s reform of the business rates system coming into effect in April next year will impact larger stores valued over £500,000, while smaller properties will have their rates reduced.

While the Treasury has not decided on the new rates, sources told The Telegraph that any surcharge on bigger properties will be set at the maximum possible.

In evidence submitted to the Communities and Local Government secretary, M&S reported that 111 of its branches would be hit with higher bills and could be forced to close.

“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 retailer said.

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

M&S warned the higher taxes would greater affect its stores “in areas where young people are struggling to find jobs” like the West Midlands and North East.

It also criticised ministers for “misleading” the public by claiming that the new charges was primarily aimed at taxing online giants.

The government has argued that the business rates increase would only apply to less than 1% of properties, which “captures the majority of large distribution warehouses, including those used by online giants”.

However, official records show the raid will impact nearly 17,000 business premises and only around a fifth of those are warehouses used by etailers.

A Treasury spokesman told the publication: “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.”

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