The slashing of business rates discounts for embattled high streets, the length and breadth of England, will cost an extra £1.03 billion in tax for retail, leisure, and hospitality firms on 1st April with London hit the hardest.
As new tax demands start to be received by business up and down the country, ahead of the 2025/26 financial year, analysis by the global tax and software firm Ryan, reveals that business discounts for high street businesses will be cut from £2.41 billion to £1.38 billion.
At the 2024 Autumn Budget, the Government announced that whilst it would continue with the retail, leisure and hospitality business rates discount scheme for the 2025/26 financial year, the discount for eligible properties would be slashed to 40%, down from 75% during both 2023/24 and 2024/25, again up to a cash cap of £110,000 per business.
According to Ryan, around 30% of the extra tax revenue raised through the cut to the discounts from 1st April will come from London’s 32 boroughs and the City of London costing businesses there an extra £309.65 million in business rates whilst an extra £157.85 million will come from those businesses across the South East and £110.46 million from firms in the North West of England.
| English Region | Cost of Business Rates Discount Cut During 2025/26 |
| South East | £157,849,097 |
| East Midlands | £57,851,800 |
| East of England | £105,124,850 |
| London | £309,650,473 |
| Yorkshire and The Humber | £71,410,525 |
| South West | £106,391,207 |
| West Midlands | £77,578,650 |
| North West | £110,457,807 |
| North East | £31,456,916 |
| Total | £1,027,771,325 |
Source: global tax and software firm, Ryan
Alex Probyn, a property tax expert at Ryan said “the upshot is that the average shop, pub or restaurant will see their business rates bill rise by 140% in less than a month and that will disproportionately affect small and independent businesses across sectors already struggling.”
Businesses in Westminster face the largest business rates increase of £45.25 million through the cut to the discount followed by those businesses in Camden, home to Sir Kier Starmer’s Holborn and St. Pancras constituency, who will lose £24.31 million through the cut.
| 10 Biggest Losers by Council Area | Cost of Business Rates Discount Cut During 2025/26 | ||||
| Westminster | £45,249,958 | ||||
| Camden | £24,305,584 | ||||
| Kensington & Chelsea | £23,579,365 | ||||
| Birmingham | £20,368,628 | ||||
| Tower Hamlets | £17,111,115 | ||||
| North Yorkshire | £16,498,921 | ||||
| Manchester | £15,953,741 | ||||
| Cornwall UA | £15,270,965 | ||||
| Liverpool | £13,801,485 | ||||
| Newham | £12,305,124 | ||||
Source: global tax and software firm, Ryan
Probyn added “this comes on top of a tsunami of other rising costs making it a complex and challenging environment to operate within.” Inflationary pressures are rising, higher employer National Insurance contributions, higher National Living Wage, and a new packaging levy all come into effect on 1st April.
It is estimated that Councils across England will raise £27.8 billion in business rates income for the 2025/26 financial year up 5.7% from £26.3 billion during 2024/25 with two thirds of that increase coming from the cut in the discount for retail, leisure, and hospitality firms.
Business rates are devolved to Scotland, Wales, and Northern Ireland.