Retailers in London’s West End have warned that new business rates reforms could lead to store closures and job losses, as the prime shopping district faces a collective £44.5 million rise in property bills next year.
New West End, which represents 600 retail, hospitality and leisure businesses in the area, highlighted a potential 20 per cent increase in rates bills following changes announced in the Autumn Budget.
New West End chief executive De Courcy described the rise as “another cost to businesses” on top of higher employers’ National Insurance contributions and the minimum wage. “In the face of a rapidly rising tax bill, it is difficult to see how an increased business rates burden will not tip the scales towards job losses and shop closures,” she warned.
Chancellor Rachel Reeves used her latest Budget to unveil a two-tier business rate for retail, hospitality and leisure properties with rateable values of less than £500,000 from 2026 to 2027. While the Treasury’s discussion paper suggests these measures will Larger distribution sites are used by “online giants”, but more than two-thirds of New West End members say they would pay “millions extra” each year. The region’s leading retailers, including Marks & Spencer and H&M, are already struggling with shrinking margins and footfall challenges.
The government relies on business rates – which are expected to raise £26 billion in England this year – as a steady source of income for local authorities, but brick-and-mortar stores say the system imposes a heavy burden on property-intensive sectors. The British Retail Consortium has also expressed concerns, highlighting that retail and hospitality currently bear more than a third of total business rates costs despite making up just 9 per cent of the overall economy.
Labour’s manifesto pledges to replace the current structure with a fairer system that “levels the playing field” between physical stores and online giants, with the aim of combating empty high street retail units. While businesses welcome the overhaul, many remain concerned about short-term costs and their impact on already fragile margins. The government declined to comment on the warnings issued by West End retailers.
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