London’s West End is facing a major new challenge.
Already under pressure, the West End 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.
From next April, a proposed new business rates tax hike could hit England's high streets and city centres. HOLBA's latest analysis warns that, in particular, London businesses, could see an average 26% rise. This is likely to impact retail, hospitality, and leisure sectors particularly hard - the cultural heart of the capital and the lifeblood of UK high streets — as many are already operating on razor-thin margins.
Ahead of the 2025 Autumn Budget, join our experts for a webinar exploring the Government’s proposed business rate changes, what they mean for your business, and HOLBA’s post-Budget campaign plans.
Since the introduction of business rates in 1990, the world has changed - over 20% of the UK's economy is now digital - however, the business rates system hasn't kept up.
Many online and high street businesses rely on each other. Digital platforms can drive footfall, while vibrant destinations can give brands both visibility and build consumer trust. Yet, bricks-and-mortar businesses shoulder a disproportionate and unfair tax burden, effectively subsidising online sales.
Rising business costs threaten not only London’s West End, but city centres and high streets nationwide. Their strength lies in a diverse Experience Economy — theatres, exhibitions, cinemas, restaurants, retailers, and live events. These businesses drive growth, jobs, and vibrancy.
When London slows, the whole economy and country feels it — from supply chains to local jobs and national tax receipts. London’s businesses aren’t asking for special treatment — just a system that rewards enterprise, investment, and collaboration.
Because when London succeeds, the UK thrives.
This British hotel chain operates over 10 properties in central London, offering smart, space-efficient rooms at a more accessible price point than most competitors.
From April 2026, its business rates bill is set to jump by an estimated 60% — on top of steep cost increases already absorbed over the past year.
To cope, the chain is reviewing staffing levels across its hotels and leaving vacancies unfilled — a move that risks service standards and jobs in a sector already under pressure.
In the heart of the West End, this world-class attraction delivers unforgettable experiences for families and corporate groups alike, attracting 100,000s people per year to the area.
Under the proposed higher rate multiplier, as well as the removal of the rates relief scheme, the business will see its annual rates bill more than double, pushing its total tax burden past £2 million.
As a result, the business has already paused investment and expansion plans in London, pushing the business to look overseas instead. For the wider economy, that means fewer jobs, less innovation, and a weaker experience economy — putting the ambitions of the London Growth Plan at risk.
To keep London’s cultural attractions thriving, tax policy must strike a balance: raising revenue without stifling the very industries that make the city a global leader.
This West End theatre hosts a resident production and delivers over 400 performances each year. The venue employs a mix of permanent staff, front-of-house teams, and technical crews, and, like many of the UK’s historic theatres, requires constant investment in maintenance, safety, building improvement, and accessibility.
Under the Government's business rate proposals, from next April, the theatre faces a projected 26% rise in its business rates bill: increasing from £275,000 to £344,000.
With operating costs for utilities, staffing, and insurance rising at twice the rate of revenue, there is little capacity to absorb additional fixed costs. Ticket prices cannot simply be increased without undermining audience accessibility and demand.
The additional business rate burden will inevitably divert essential funds from maintenance and modernisation, reducing flexibility for wider investment priorities, including accessibility enhancements and environmental upgrades that support the theatre’s long-term sustainability.
As costs rise and margins tighten, the risk grows that heritage venues will become less attractive to producers and audiences alike, threatening a cornerstone of the UK’s cultural economy and visitor appeal. For every £1 spent on a theatre ticket, an additional £1.40 is spent locally in restaurants, bars, shops, and transport.
Increased business rates therefore risk weakening the wider ecosystem that depends on the West End’s success.
HOLBA is urging Government to adopt our fairer, smarter system that cuts business rates by a third, spreads the tax burden across the modern economy — including online — and still raises £6bn more for Government.
How it works:
A modern economy deserves a modern tax system.
HOLBA will continue to campaign on behalf of its 500+ members to ensure a fairer business rates system is implemented.
The Government needs to listen to businesses and take this next step to creating a business rates system fit for the 21st century.
Is this going to impact your business? Or do you want to find out if it will?
Contact our Head of Public Affairs, Antonia Stratford, at antonia@holba.london, for further information.
We're calling for Real Rates Reform. Sign up to follow our campaign as we press the Government about the damaging effects on London’s businesses.
Many of our members who will be affected by this tax rise are retail, hospitality and leisure businesses – the majority of whom are currently operating on wafer thin margins. The cumulative impact of these cost rises is already stifling investment, employment and growth which could be very damaging in the long term for our area of the West End that is worth over £12.8BN annually to the UK’s economy.
Ros Morgan, Chief Executive, HOLBA
Hear from experts Alexander Jan, Chief Economic Advisor to the London Property Alliance and Paul Barnes, Managing Director, Attis Partnership as they explain the proposed changes in greater detail.
