What the Keyshells Are Saying About the New Rates Law
John Webber, the big‑wig at Colliers, just dropped a bombshell: the Government’s new business‑rates bill is barely threaded and could slap a millions‑of‑pounds extra load on UK PLCs.
The Real Cost to Big‑Business
- Retail giants and hospitality cages will feel the sting. More money on the back of their backs could slow hiring and dent fresh investment.
- The fix? The Ministry says it wants to save high streets, but the plan may break the street instead.
The New Draft Law
The government has rolled out a draft to the Commons which would allow permanent rate cuts for high‑street shops starting 2026. How? By taxing the top‑tier landlords – the biggest, most valuable sites.
“Raise the bar for the 1% of property with rates over £500,000,” said Treasury’s Exchequer Secretary, James Murray.
He claims the move will “give retail, hospitality and leisure a much‑needed certainty and support.”
Budget Shifts
However, in the Budget the top‑tier relief for shopping, dining and leisure was shrugged from 75% down to 40% for a year starting April 2025.
Bottom line? The new legislation heaps additional costs on the very sector it promises to cheer, and the government will likely end up tightening the purse strings even more than it intended.
What this would mean in practice
The UK’s New Tax Crunch: Business Rates to Rattle the Big Bucks
What the New Legislation Stinks About
The government is eyeing a change that could bump the higher multiplier—the rate at which property businesses pay tax—by up to 10p per pound for firms with retail values over £500,000. In plain English, that means more tax on the big guys that keep our streets busy.
Where the Extra Pounds Will Check In
Here’s a quick rundown of the sectors that could feel the squeeze, and how much extra they might owe:
- Office sector: £677 million spike in annual rates bill
- Large distribution warehouses: £266 million overload
- Hypermarkets & bigger supermarkets: £228 million jump
- Larger shops: over £87 million extra
- Retail warehouses & foodstores: £37.5 million boost
- 4‑star hotels & major chains: £58.6 million increase
Retail Giants Get the Pinch
Even the moguls aren’t safe. Tesco could see a hike of more than £80 million, while Sainsbury’s and Asda might be looking at over £60 million each.
The Sheltered Sector Isn’t a Bastion
Large industrial and manufacturing tenants could face an increase of up to £84.5 million. Factories, workshops, bakeries, and dairies—those that keep the high street humming—may add an extra £81.9 million to their bills.
Beyond Retail: Health, Education & the Unexpected
- NHS hospitals and clinics: an extra £78 million
- Local authority schools: roughly £40 million more, at a time when budgets are already stretched thin
Revaluation: The Hidden Wildcard
On top of this tax hike, there’s a planned revaluation in 2026 that could push rateable values higher by 15–20% across the board. That means the multiplier could soon be a full 60p in the pound for some sectors, turning a “simple” tax into a labyrinth.
Industry’s Story in a Nutshell
Webber, a vocal critic, says: “The government’s approach is a blunt instrument that will kill growth and investment. By piling on costs, the big retailers and hospitality businesses—who actually create jobs—are squeezed. The result? Consumers pay more, jobs drop, and the high street suffers.”
He also notes the rushed timeline: the bill’s second reading finished in November, third reading is imminent. The Treasury is moving fast, apparently to lock in higher rates for private schools by January, without enough industry consultation.
There’s another thorn: a clause that lets the Treasury redefine qualifying retail, hospitality, and leisure hereditament. Until they clarify what estates fall under the new law, businesses are left guessing, which makes the already muddled system even messier.
What Should Have Been Different?
Webber hopes for an overall lower multiplier instead of expanding it. A rebasement that leads to a more manageable tax rate could stimulate growth, simplify the system, and, most importantly, keep the high street alive.
Final Word
In short, this proposed tax tweak isn’t a hand‑picking stroll toward prosperity. It’s a roll of the dice that threatens to bruise the very businesses that keep our cities buzzing. The government’s next move should be to revisit the policy—or at least listen to industry voices before turning the screws again.
