Retailers in London’s West End have warned that new business rates reforms could spell store closures and job losses, with the flagship shopping district facing a collective rise of £44.5 million in property bills next year.
The New West End Company, which represents 600 retail, hospitality and leisure businesses in the area, highlighted a potential 20 per cent hike in rates bills following changes announced in the autumn budget.
Dee Corsi, chief executive of the New West End Company, described the rise as “another cost for businesses” on top of rising employers’ national insurance contributions and the minimum wage. “Already faced with a rapidly rising tax bill, it is hard to see how increasing the business rates burden won’t tip the scales 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 rateable values under £500,000 from 2026-27. While the Treasury’s discussion paper notes these measures will capture larger distribution sites used by “online giants”, more than two thirds of New West End members say they will pay “millions more” each year. Prominent retailers in the district, including Marks & Spencer and H&M, are already grappling with squeezed margins and footfall challenges.
The government relies on business rates—forecast to raise £26 billion in England this year—as a stable source of revenue for local authorities, but bricks-and-mortar shops argue that the system places too heavy a burden on property-intensive sectors. The British Retail Consortium has also voiced concerns, stressing that retail and hospitality currently shoulder over a third of total business rate costs despite making up only 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 shops and online behemoths, aiming to combat empty retail units across high streets. While businesses welcome an overhaul, many remain anxious about short-term costs and the impact on already-fragile margins. The government declined to comment on the warnings from West End retailers.