Britain’s biggest retailers face £600m surge to business rates bill
Britain’s biggest supermarkets and West End stores face a £600m surge in property taxes next year from the Government's reform of business rates.
Britain’s biggest supermarkets and West End stores face a £600m surge in property taxes next year due to the Government’s reform of business rates.
The new system, which come into effect from April 2026, will impact larger stores valued over £500,000, according to research by property agents Colliers for The Times.
The reforms will reduce the business rates multiplier for smaller retail, hospitality and leisure sites from next year. However, the cuts will be funded by an increase in the multiplier on larger properties.
Colliers estimates that more than 90% of the store portfolios of Tesco, Asda and Sainsbury’s have rateable values (RV) above the £500,000 threshold.
The firm expects the grocery sector alone to be facing more than £350m in additional costs annually, with suppliers such as food manufacturers, bakeries and dairies also set to be hit with steeper bills.
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Colliers estimates that the largest retail shops across the UK will see their business rates bill jump by at least £600m in 2026. This is on top of the existing £11bn bill and recent additional costs such as the National Insurance increases.
Its data shows that 335 retail properties in the West End will be the hardest hit by the changes and are likely to exceed the £500,000 RV threshold from April next year.
Colliers calculates that rateable values in the area will rise around 30% to be 55p in the pound following the revaluation.
Annual liabilities for these sites are projected to jump from £212m to £274m – equating to an average increase of £182,727 per property.
A Treasury spokesman told The Times: “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.
“Our reform to the business rates system will introduce new, permanently lower business rates in 2026 while removing the £110,000 cap, benefiting over 280,000 retail, hospitality and leisure business properties.
“This will be sustainably funded by a new, higher rate on the 1% of most valuable business properties.”
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