London’s West End is facing a major new challenge.
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.
From next April, a proposed new business rates tax hike could hit London’s businesses. HOLBA's latest analysis warns that for affected London businesses, this could mean 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.
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. Today, bricks-and-mortar businesses shoulder an 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. Penalise them and we put the entire ecosystem at risk.
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.
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.
Sign up to follow our campaign as we press the Government about the damaging effects to 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.
