London’s High Street Facing a #TaxStorm: Why Big Shops Are the New Rainmakers
Sound the trumpet: from next April, the biggest retail, hospitality and leisure (RHL) spots in the West End will see a £600 million hike in business rates. Colliers’ experts say the Government’s “Save the high street” plan might actually do the opposite of what it promised.
What’s the Deal With the New Multipliers?
The Non‑Domestic Rates Bill has just rolled through Parliament. It’s supposed to dial the rates multiplier down from £3.50/pound in 2026 for smaller RHL properties. But, get this—the multiplier for larger properties (those above £500,000 in rateable value) can jump up by as much as 10p. That translates into about a 20 % extra tax bite on the big shops and restaurants.
Why Does It Happen?
- Big players are seen as anchors that bring crowds to the town centre—think supermarkets, flagship stores, and major cafés.
- The policy shifts the tax burden onto these anchors, hoping the chatter from the big names will generate more footfall for the smaller ones.
- In reality, the extra variance means the big tenants are footing the bill for the new, higher multiplier.
Who Is Up for Grabbing the Tax Charge?
Colliers’ calculations show:
- Over £400 million a year in new rates for large food stores, retail warehouses, and their supply chain giants—factories, warehouses, bakeries, and dairies all feel the squeeze.
- Nearly 90 % of grocery chains like Tesco, Asda and Sainsbury’s own big properties have rateable values above the threshold.
The West End’s Sparkling Breakdown
In the West End, there are 335 retail properties that are either already above £500,000 or will be after the 2026 Revaluation. Their rateable values could climb by about 30 %. With the high multiplier expected at roughly 55p/pound, the annual bill leaps from £212 million to £274 million. That’s a staggering rise of about £182 k per property—big enough to make even the most robust flagship store look nervous.
Why Small Shops Aren’t Saving the Day
While the policy offers a lower multiplier for smaller RHL businesses, those shops are already feeling the heat. They’re losing business rate reliefs and will the tax relief vanish next year. Even if their multiplier drops, the anticipated rise in their rateable values is likely to blunt any benefit.
What the Experts Say
John Webber from Colliers pens a reminder: “When our high street is already battling reduced reliefs and higher employment costs, top-tier businesses—those that actually pull foot traffic and jobs—being hit hard feels like a double‑edged sword.”
He warns that without a flatter multiplier across the board, businesses may pause expansions and hiring. “We had expected a universal drop to £3.50 in the multiplier—something all shops could afford and would spur growth. Instead, the net result looks like a more tangled, damaging scheme.
Bottom Line
So, prepare for a financial drizzle on London’s biggest retail outlets. The policy, intended to save the high street, might end up flooding it with extra taxes, forcing big stores to dip into deep pockets while the little shops, already on thin margins, could find the rights to a “hollow” victory. The end? A high street that looks like a crowded retail pharmacy—only the biggest ones are paying for the extra medicine.
