Businesses face 140% rates increase in April, says Colliers
Thousands of businesses, including retailers, will see their rates more than double in April, according to a new report.
Colliers said that shops, restaurants, pubs, gyms, and nightclubs could see their business rates increase by 140% from April 1st, when retail, hospitality, and leisure rates reliefs are reduced from 75% to 40%.
The property consultancy firm has calculated that this will mean retailers currently benefiting from the relief will see their business rates bills increase on average from £3,751 a year to £9,003, restaurants will see a rise on average from £5,563 to £13,351 a year, while the average pub will also see its rates bill go up from £4,017 to £9,642 a year.
The Retail, Hospitality and Leisure Relief Scheme was introduced by the Conservative Government in November 2022 in an attempt to protect the sector from high rates bills. The scheme provided eligible properties with 75% business rates relief up to a cash cap of £110,000 per business. However, the new Labour Chancellor Rachel Reeves announced this would be reduced to 40% in last year’s Autumn Statement.
Colliers said that further rises will be unsustainable for many. According to a recent report from the Centre for Retail Research, store closures in 2025 are forecast to be as high as 17,349, with business rates seen as the final blow to a sector already paying for increases to employer national insurance contributions and the minimum wage.
The group said more pub closures are looking likely, after 400 shut their doors in 2024. According to analysis from insolvency specialists Price Bailey, more than 1 in 10 British pubs are at imminent risk of closure in 2025.
Colliers said that other leisure businesses will also be impacted by the cut in relief, including nightclubs, which it said will on average see their annual bills rise from £7,479 to £18,245 in April. Gyms are also set to see their bills rise – on average from £2,942 to £7,060 in April.
John Webber, 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.”