Largest retailers to pay £600m extra in business rates from 2026

Major supermarkets and West End stores are set to pay an extra £600m in business rates from April 2026 following government reforms, according to analysis by property firm Colliers for The Times.

The changes will lower the business rates multiplier for smaller retail, hospitality and leisure sites, with the shortfall recouped by hiking the multiplier on larger properties.

Colliers found that over 90% of store portfolios held by Tesco, Asda and Sainsbury’s have rateable values above the £500k threshold. It warns that grocery chains alone will face more than £350m in additional annual costs – and that suppliers such as food manufacturers, bakeries and dairies will see bills rise too.

The firm estimates that the highest‑value retail premises will pay at least £600m more in 2026, on top of an existing annual business‑rates bill of £11bn, with recent cost rises including National Insurance increases.

Colliers identified 335 retail units in the West End likely to cross the £500k rateable‑value mark from April. It forecasts rateable values there will rise by almost 30%, applying a 55p in the pound rate following revaluation – boosting annual liabilities from £212m to £274m. That represents an average rise of £182,727 per property.

A Treasury spokesman told The Times: “We are a pro‑business government that is creating a fairer business rates system to protect the high street, support investment and level the playing field.

“Our reform to the business rates system will introduce new, permanently lower business rates in 2026 while removing the £110k cap, benefiting over 280,000 retail, hospitality and leisure business properties. This will be sustainably funded by a new, higher rate on the 1% of most valuable business properties.”