Britain’s greatest retailers are bracing for a pointy rise in property tax payments as authorities reforms to the enterprise charges system threaten so as to add £600 million in prices throughout the sector, with London’s West Finish and main grocery store chains among the many worst hit.
Based on evaluation by property consultancy Colliers, modifications because of take impact from April 2026 will see the enterprise charges burden disproportionately shifted onto bigger industrial properties, notably these with a rateable worth (RV) above £500,000. Whereas the reforms are designed to assist smaller excessive road companies by reducing their tax multiplier, the Treasury plans to fund the lower by imposing increased charges on essentially the most priceless retail, leisure and hospitality properties.
John Webber, head of enterprise charges at Colliers, condemned the brand new coverage as “nuts”, warning that it unfairly targets the very companies that underpin the excessive road financial system. “At a time when our high streets are under immense pressure, and major retailers are facing increased employment costs from national insurance and minimum wage rises, the government’s decision to pile more tax onto anchor tenants is self-defeating,” he mentioned.
Colliers’ estimates recommend that the UK’s largest outlets will collectively face a £600 million rise in annual liabilities, on high of an current £11 billion invoice for 2025. Supermarkets are anticipated to bear the brunt, with greater than 90 per cent of Tesco, Asda and Sainsbury’s retailer portfolios anticipated to breach the £500,000 RV threshold. The grocery sector alone might face greater than £350 million in further prices every year, whereas the affect will seemingly ripple out to suppliers reminiscent of meals producers and producers.
The West Finish of London is forecast to be the only most closely impacted area. Colliers expects that 335 retail properties in areas reminiscent of Knightsbridge will see their rateable values climb by round 30 per cent following the revaluation. With the enterprise charges multiplier for high-value properties anticipated to succeed in 55p within the pound, annual liabilities for West Finish properties might surge from £212 million to £274 million. This equates to a mean annual enhance of greater than £182,000 per property.
Whereas the federal government insists the reforms will profit the vast majority of smaller companies, Webber warned that even these could not really feel a lot aid. “Reliefs have already been cut back sharply and, for many, steep rateable value increases could wipe out any gains from the lower multiplier,” he mentioned.
A Treasury spokesperson defended the reforms, describing them as a needed step in direction of a “fairer and more sustainable” enterprise charges system. “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,” they mentioned.
They added that the upcoming modifications will ship completely decrease enterprise charges for greater than 280,000 retail, hospitality and leisure properties, by scrapping the present £110,000 cap and introducing a brand new fee focusing on the highest 1 per cent of economic properties.
Retailers, nonetheless, argue that the blunt nature of the reforms dangers damaging the excessive road moderately than saving it. With operational prices already rising and shopper spending underneath stress, a major tax rise might additional pressure large-scale retailers — lots of whom function anchor tenants, draw footfall, and assist provide chains important to the broader financial system.
Because the April 2026 implementation date approaches, calls are prone to develop for the federal government to rethink the way it balances aid for small companies with the viability of bigger industrial operators that also play a central position on the town and metropolis centres.
