Britain's biggest supermarkets and West End retailers are facing a £600 million surge in property taxes next year as Government reforms to business rates take effect from April 2026.

The new system will disproportionately impact larger stores with valuations above £500,000, according to analysis by property agents Colliers in a report for The Times. While smaller retail, hospitality and leisure properties will benefit from a lower business rates multiplier, the cuts will be funded by increasing the multiplier on larger commercial properties across all sectors.

John Webber, head of business rates at Colliers, criticised the policy as "nuts" and said it "piles pressure on the very businesses we need to revitalise the high street".

"At a time when our high street is suffering with the cutting of reliefs for the small stores and the bigger stores are seeing the hike in employment costs with the increase in employer national insurance contributions and the national minimum wage, why does the government think it is sensible to hit the bigger retail, hospitality and leisure players," he told the paper.

London's West End is expected to bear the brunt of the changes, with 335 retail properties in areas including Knightsbridge likely to exceed the £500,000 rateable value threshold. Colliers estimates that rateable values in the area will rise around 30 per cent following the revaluation, with the higher multiplier expected to be around 55p in the pound.

Annual liabilities for these West End properties are projected to jump from £212 million to £274 million, equating to an average increase of £182,727 per property.

The supermarket sector faces particularly steep increases, with Colliers calculating that more than 90 per cent of store portfolios belonging to Tesco, Asda and Sainsbury's have rateable values above the £500,000 threshold. The grocery sector alone is expected to face more than £350 million in additional costs annually, with suppliers including food manufacturers, bakeries and dairies also facing higher bills.

The £600 million increase comes on top of an existing £11 billion business rates bill for the retail sector in 2025 and recent additional costs such as national insurance increases.

Webber warned that even smaller businesses may not benefit significantly from the reforms. "Even the smaller retail, hospitality and leisure businesses may find this a hollow victory," he said. "Reliefs have already been slashed and steep rateable value rises could offset any gains."

A Treasury spokesman defended the reforms, telling 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 £110,000 cap, benefiting over 280,000 retail, hospitality and leisure business properties. This will be sustainably funded by a new, higher rate on the 1 per cent of most valuable business properties."

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