Real Rates Reform
The West End, already under pressure, now faces the prospect of a new business rates ‘mega tax’ that risks choking growth in an area worth over £55 billion to the UK economy.
A looming £2BN Increase in Business Rates
London’s West End is one of the most dynamic and iconic economic districts in the world. But right now, it’s facing a major challenge.
From April 2026, London businesses could be hit with an estimated £2 billion increase in business rates.
What’s driving this tax hike?
New analysis commissioned by HOLBA shows a potential 26% rise in central London business rates, caused by three key changes:
- Rising rateable values, up by an estimated 5% – 20%.
- A new Higher Rate Multiplier, which alone could cost London firms an additional £1 billion.
- Scrapping of the £110,000 cap on sector reliefs, adding around £700 million in extra costs.
This is on top of the £9 billion London already contributes each year in business rates — that’s one-third of the national total.
Ros Morgan, Chief Executive, HOLBA, said: “Businesses in the West End and across London are staring down the barrel of a huge tax hike — with no justification or reform. The current business rate system places disproportionate pressure on physical businesses that drive economic activity and footfall. HOLBA is currently working on a solution to help the Government finally fix this broken system and protect our economic future.”
Ojay McDonald from the Association of Town and City Management said: “Business rates desperately need to be modernised. With the growth of digital technology, they simply do not reflect 21st-century economic activity anymore. We have reached a crossroads. This is not just a London problem, but a problem for high streets across the country. While we are delighted that smaller businesses will benefit from a lower multiplier, if the big footfall generators, they are co-located with, must close, because of increased costs, then everybody loses out.”
Neil Dolan, Managing Director of Little Lion Entertainment, which operates the visitor attraction The Crystal Maze LIVE Experience, said: “Every business should pay its fair share to support vital local services — but the current property-based system is outdated and penalises those investing in and operating from bricks-and-mortar venues in city centres like London’s West End. Reform must reflect the digital age and champion continued investment in our cultural heritage.”
From visitor attractions like The Crystal Maze LIVE Experience to world-class theatres and restaurants, our city’s cultural and economic ecosystem is reliant on physical spaces that attract millions. But under the current model, they are being unfairly penalised.
HOLBA is calling for the Government to pause the implementation of the 2026 changes, undertake a comprehensive review to fully understand the impact on businesses and consider a new, fairer system that expands the current tax base.