Retailers in London’s West End have warned that new business rates reforms could lead to store closures and job losses, with the prime shopping area facing a collective £44.5 million increase in property bills next year.
The New West End Company, which represents 600 retail, hospitality and leisure businesses in the area, highlighted a possible 20 per cent increase in rates following changes announced in the autumn budget.
Dee Corsi, chief executive of the New West End Company, described the increase as “another cost to businesses” on top of rising employer contributions to national insurance and the minimum wage. “Already facing a rapidly rising tax bill, it is difficult to see how raising business rates will not tip the balance towards job losses and store closures,” she warned.
Chancellor Rachel Reeves used her recent Budget to unveil a two-tiered business rate for retail, hospitality and leisure properties with a rateable value of less than £500,000 between 2026 and 2027. Although the Treasury discussion paper notes that these measures will include larger distribution sites used by ‘online giants’, more than two-thirds of New West End members say they will pay ‘millions more’ every year. Prominent retailers in the district, including Marks & Spencer and H&M, are already struggling with tight margins and footfall.
The government is relying on business rates – which are expected to raise £26 billion in England this year – as a stable source of income for local authorities, but bricks-and-mortar retailers argue the system is placing too heavy a burden on property-intensive sectors. The British Retail Consortium has also raised concerns, highlighting that retail and hospitality currently account for a third of total business rates costs, despite making up just 9 percent of the total economy.
Labour’s manifesto promises to replace the current structure with a fairer system that “levels the playing field” between physical stores and online giants, with the aim of tackling vacant properties on the high street. While companies welcome a review, many remain concerned about the short-term costs and impact on already fragile margins. The government declined to comment on the warnings from West End retailers.