The UK’s largest retailers are rising sharply for the property tax bill as government reforms to the commercial rate regime threaten £600 million in costs across the industry, with London’s West End and major supermarket chains the worst.
According to analyses by the real estate consulting firm, changes that take effect from April 2026 will disproportionately transfer the business expense burden to larger commercial properties, especially commercial properties with a value of more than £500,000 (RV). While the reforms aim to support smaller high street businesses by lowering tax multipliers, the Treasury plans to fund cuts by raising interest rates for the most valuable tax rates for retail, leisure and hotels.
John Webber, head of commercial price at Colliers, condemned the new policy as “nuts”, warning that it was unfairly targeting businesses based on the high street economy. “At a time when our streets are under tremendous pressure, major retailers are facing employment costs with rising national insurance and minimum wages, and it is self-deception for the government to decide to include more taxes into anchoring tenants,” he said.
Colliers’ estimates suggest that the UK’s largest stores will uniformly face annual debt growth of £600 million, except for the existing £11 billion bill in 2025. The grocery industry alone can face additional costs of more than £350 million a year, and the impact could be brought to suppliers such as food manufacturers and producers.
London’s West End is expected to be the worst affected area. The coal mines expect that after the revaluation, 335 retail industries in areas such as Knightsbridge will see their ratings climb by about 30%. As the business interest rate multiplier for high-value properties is expected to reach 55p, the annual liabilities of West Side properties may increase from £212m to £274m. This is equivalent to an average annual increase of £182,000 per property.
While the government insists on reforms will benefit most smaller businesses, Weber warns that even these businesses may not feel relieved. “The relief has been drastically reduced, and for many steep increase in evaluable value may eliminate any gains from the lower multiplier,” he said.
A spokesman for the Ministry of Finance defended these reforms, describing them as necessary steps towards a “fair and more sustainable” commercial price system. “We are a pro-business government and are building a more equitable business rate system to protect high streets, support investment and improve the competitive environment,” they said.
They added that the upcoming changes will permanently lower the business interest rate by removing the current cap of £110,000 and introducing new interest rates for the highest commercial properties at 1% with business rates of over 280,000 retail, hospitality and leisure properties.
However, retailers believe that the bluntness of reform may damage rather than save the streets. As operating costs have risen and consumer spending under pressure, a sharp rise in taxes could further pose a damage to large-scale retailers – many of whom are anchoring tenants, attracting flows and providing supply chains that are critical to the broader economy.
As the April 2026 implementation date approaches, the government may increase calls to rethink how it can balance relief for small businesses with the feasibility of large business operators who still play a central role in towns and urban centers.
