Businesses in London will be disproportionately impacted by an increase in business rates if chancellor Rachel Reeves goes ahead with planned reforms of the system, according to new data from Search Acumen.
The property data provider’s analysis shows there are 16,780 properties across England above the rateable value of £500,000, with almost two-fifths (37%) of these properties based in the capital.
The 6,100 premises located in London have a rateable value of £9bn – nearly half of the overall collective value of rateable properties above the £500,000 threshold – and 70% of all of England’s office spaces, which sit in the top bands of business rates, are in London.
The chancellor announced that lower multipliers will be introduced in England for retail, hospitality and leisure (RHL) properties whose 2026 rateable value is below £500,000, and to fund the initiative, a new higher multiplier for those above £500,000 will also be introduced.
Details of the lower and higher multipliers will be confirmed in the 2025 Budget, once the government has analysed the new 2026 rateable values, which are due to take effect in April 2026.
The sectors that will be hardest hit if a business rates surcharge is introduced at the top band, are offices (27%) and industrial and logistics (21%).
Andrew Lloyd, managing director of Search Acumen, said: “The prospect of higher business rates, when taxes are already at record levels, risks choking investment, jobs and growth – especially in professional service sectors that are most vulnerable to higher office rents. Hiking costs in a low-growth, high-inflation environment is a risky move.
“Large operators such as supermarkets and logistics firms are bracing for higher bills that could push marginal sites into the red. Calls to spare supermarkets from the top tax band reflect fears that steeper rates would feed through to food prices and consumers’ pockets.
“London’s productivity has slipped below pre-pandemic levels, and for firms already squeezed by payroll costs, we may see an increase in mergers, acquisitions and business closures. If cashflow margins collapse under rising tax pressure, property sell-offs, higher vacancy rates, reduced investment and property devaluations in some parts of the market are all possible.”
