Business rates policy piles more pressure on high street – expert

High street businesses are set to come under further pressure as bills for the new rating year start to drop through the letterbox, according to a business rates expert.

According to property consultancy Colliers, the Government’s decision to cut the retail, hospitality and leisure business rates reliefs from 75 per cent to 40 per cent from 1 April will mean thousands of shops, restaurants, pubs, gyms and nightclubs will see business rates bills rise by 140 per cent or more in the year ahead.

The Conservative Government introduced the Retail, Hospitality and Leisure Relief Scheme in November 2022 to cushion the sector from high rates bills that many could not afford.

The scheme provided eligible properties with 75 per cent business rates relief up to a cash cap of £110,000 per business.

However, in her first Autumn Statement, Labour Chancellor Rachel Reeves announced this would be reduced to 40 per cent.

Colliers say this will mean that retailers currently benefiting from the relief will see their business rates bills increase in April on average from £3,751 a year to £9,003, and restaurants will see a rise on average from £5,563 to £13,351 a year.

The average pub will also see its rates bill go up –from £4,017 to £9,642 a year.

Colliers says such rises will be unsustainable for many.

Other leisure businesses will also be impacted by the cut in relief.

According to Colliers, nightclubs will on average see their annual bills rise from £7,479 to a staggering £18,245 in April.

And gyms will also see their bills rise substantially – on average from £2,942 to £7,060 in April.

John Webber (pictured), head of business rates at Colliers, said: “The Government has said it will help the retail, hospitality and leisure (RHL) sectors by introducing a lower multiplier for those who have up to now received reliefs.

“However, we question how helpful this will be since this won’t be implemented until April 2026 and will coincide with the 2026 Revaluation where RHL rateable values are expected to rise in line with rental growth, resulting in rates higher bills.

“Meanwhile businesses still have the year ahead to face in which the current reliefs will be slashed with no other cushion for businesses.”

“The RHL sector has already been hit for six with the increases in employer national insurance contributions, increases in the minimum wage and increased inflation.

“Many businesses are now considering their options, and some won’t survive.

“For the government to add these extra business rates costs on top just now beggars belief.

“Labour said if it came into power, it would ‘Save the High Street’.

“This slashing of reliefs will sadly do just the opposite - as we’ll sadly see when the bills drop through the letterbox in the month ahead.”