Business Rates Experts Call The Chancellor To Cancel S Proposed Surcharge On Bigger Businesses And Bring In Reform

The Chancellor should cancel her proposals for a new complicated system of multipliers when she announces her Autumn Budget next month, and in particular the higher surcharge planned for bigger businesses- if she is truly serious about encouraging growth in the UK and saving the High Street says John Webber, Head of Business Rates at Colliers.

“If the Chancellor does not take action to reduce this rates burden, we will see more businesses going into administration, across the board, particularly as the current  £1.7 billion Retail, Leisure and Hospitality Relief is removed by April 2026.”

Webber therefore urges the Chancellor to:

Abandon plans for a new complicated system of five multipliers as outlined in the recent Non-Domestic Rating (Multipliers and Private Schools Act) 2025; a system to be introduced to compensate the smaller retail, hospitality and leisure properties who are losing all their reliefs next April, by offering them “permanently lower business rates multipliers”.

Whilst Colliers supports the smaller RHL businesses paying a reduced business rates burden if their reliefs are to be removed, it does not agree with transferring the funding for this from the Government to the rest of UK PLC, particularly our larger businesses. The government plans to impose a new higher multiplier on all businesses with a RV above £500,000 – adding 10p in the £ to their rates bills. Essentially this is a stealth tax.

Colliers believes this approach will be damaging rather than growth-stimulating impacting all sectors and will be particularly hard hitting given the 2026 Revaluation next April where values (and therefore rates bills) are expected to rise. The office sector alone could face an additional £677 million annually in bills, distribution warehouses £266 million, and large industrial and manufacturing units another £84.5 million, by this policy alone. Even public institutions such as NHS hospitals and schools will be affected with higher bills.

Major supermarkets and larger retailers—vital anchors for high streets and key for footfall and employment —are also due to be hit. We estimate larger retail sites could collectively see £400 million in extra annual business rates costs, from this higher multiplier, likely resulting in job losses, closures and fuelling food inflation.

After pressure from retailers, the government has hinted that supermarkets might be exempted from the higher multiplier, though no decision will be made until the November Budget.

We believe it is harmful to exempting one sector as only shifts the cost burden onto others since total business rates revenue must remain constant. The whole policy was rushed and ill-considered, introduced without consultation or impact assessment. It should be dropped. Penalising larger firms with higher taxes will not foster economic growth in the country.

Announce a Road Map for Reform – to reduce the multiplier long term to 35p. The multiplier (the UBR used to calculate rate bills) should be reduced across the board for all sectors of business. Business rates are not linked to performance and property occupiers must pay them before they have earned a penny of income. Currently with multipliers at 49.9p and 55.5 for small and large businesses respectively, business rates are unacceptably high compared to the multiplier rate of 34p when introduced in 1990.  The Chancellor therefore could restore investor confidence by announcing a long-term plan to reduce the multiplier to 35p, rebasing bills to a fairer level that everyone can afford to pay and avoiding the need for reliefs or complicated multipliers.

No other European country charges businesses half the rental value of their premises in property tax and at such a high rate, business rates are a significant deterrence to new investment in the UK. By reducing the UBR, the Government would encourage investment, expansion and innovation.

Review Reliefs
Reducing the multiplier to an affordable level would preclude the need for many of the complicated reliefs most of which have been made necessary by the unaffordable level of the tax and to stave off disaster in the short term.

These reliefs have led to business rates deserts whereby 700,000 property occupiers out of 2.1 million pay no business rates all. Everyone that benefits from local public services should contribute to their maintenance but at a fair rate. Reliefs should also be reviewed every three years as a minimum to ensure they do not outlive their purpose.

Reform The Appeal System
The Valuation Office Agency’s (VOA) appeals system remains slow and overloaded. Nine months before the 2026 list, 56% of the 35,910 lodged Challenges were unresolved; only 26% had been cleared.

Our own surveyors confirm long delays. Checks which should be processed with 3 months are taking 10-12 and challenges are also delayed. With an estimated 100,000 new cases expected before April 2026 and preparations already underway for the 2029 revaluation, delays will worsen—further frustrating businesses seeking fair reassessment. Plans to reduce the time to challenge assessments for the 2029 list to a six-month window will further disadvantage rate paying businesses.

The system needs proper reform. We advise the government simplifies procedures, enhances transparency, ensures timely resolution  and integrates with annual revaluations, reducing the number of disputes as rateable values better reflects market conditions. Merging the VOA into HMRC is not the answer.

Extend Empty Property Rates Relief to Twelve Months and to Other Sectors-The current empty property relief period is too short. Many property owners take up to 12 months to find an appropriate tenant for their properties. The Chancellor should therefore extend the three- and six-month empty rates holidays to twelve months with 50% relief thereafter and to do this for all property types including the offices and retail sectors too.

Such a move would encourage investment and refurbishment, prevent unnecessary demolition, support high street and town centre regeneration and reduce the need for complex anti avoidance rules.

Round up the cowboys.- Business rates advisors are among the only providers of financial advice that do not need a license to practice. Smaller businesses in particular fall victim to cowboy rating advisors because the system is too complicated to understand without professional help. Rogue agents often take upfront payments with the promise of lowering rates bills, before disappearing with their fees.

The new “Duty to Notify” and “Review and Update” schemes to be rolled out from 1st April 2026 and mandatory by 1 April 2029 will only exacerbate the problem as many small businesses that did not previously have to engage with the system will have to update the VOA concerning any changes to their property.

The Government needs to protect small businesses by launching a consultation into rogue rating advisors’ practices and how they can be addressed. We would favour the establishment of a register of professional rating advisers.

John Webber concludes, “Labour won the General Election in 2024 promising “to abolish the (business rates) tax” and thereby “save the high street”. Yet according to the Office of Budget Responsibility figures last year, it is actually planning to raise almost £40 billion annually from the tax by 2029/30.

Far from reducing this burdensome tax, this government is therefore expanding it- into a more complex, more expensive and more bureaucratic system, and with “reforms” that only tinker around the edges. These do little to support growth or revitalise the high street or the UK economy.

The government needs to start listening to businesses, to undertake proper feasibility studies before it introduces half-baked policies and to bring in proper reform. Let’s get the (Multiplier) Road to 35 started!