Predicted £1bn increase in business rates for UK high street

Another week and another warning that SMEs and startups could be cripped by a business rate hike next April. That’s despite governmental promises of relief. 

The Office for National Statistics (ONS) has released its Consumer Prices Index (CPI) inflation figure for September; and it has resulted in concern. 

Analysts at global tax firm Ryan say that this figure suggests that overall business rates yield on companies across England will rise by 3.8% in April next year. This is alongside the revaluation of rates, which means that tax business rate taxes will be linked to property valuations from April 2024. 

The analysis comes at a time when high street names like Co-op are warning that there could be huge job losses should the UK Government not deliver the drastic rate reforms that businesses are calling for. 

Earlier this month, Co-op released new research that suggested that the UK could see 60,000 small shops and 150,000 jobs disappear if radical change doesn’t happen.

Why is the CPI inflation figure important?

The latest report from The Office for National Statistics states that the CPI rose by 3.8% in the 12 months to September 2025, which was unchanged from August.

As The Independent writes, this figure is “highly influential” as it is used as a key factor in setting many of the following year’s tax policies and welfare spending commitments. 

The analysts state that it suggests that there will be a £1.06bn increase in business rates in April 2026 as the new tax year kicks in. 

Record property taxes

A long held complaint is that business rates in the UK are cripplingly high, and this has had a profound impact on businesses. 

Andreas Adamides, CEO of Helm, a network for founders and CEOs of scaling UK companies with an average turnover of £21m, said: “The UK has the highest property taxes in the developed world, yet we keep piling on more. High streets are being choked to death whilst competing with online rivals who face a fraction of the burden.”

This is especially true for those in the hospitality industry because premises have to be large to accommodate customers. In July, Nick Mackenzie, boss of the leading pub chain, Greene King, called for urgent reform and stated that business rates should be charged on profits, rather than on property, to help relieve financial pressure on the struggling pub industry.

This call is especially urgent now as payments look set to increase for large Retail, Hospitality, and Leisure (RHL) properties – namely those with a rateable value (RV) of more than £500,000. They are set to be hit with an extra payment worth up to 10p on each £1.

Could SMEs get relief?

While this is bad news for the likes of supermarkets and office space businesses, the Government might still deliver on relief for smaller ventures. 

Despite hold ups in the House of Lords, business rate reform was mooted by the Labour Party even before the election and remains high on the agenda. 

However, as the Autumn Budget on 26 November approaches, SMEs are nervous as to what will actually materialise. Seven in 10 Brits “…doubt the Government will deliver on relief”. Promises have already been watered down, after all; and tax rises are looking certain. 

In the meanwhile, the Government is urging founders to create an online account to track their business rates closely ahead of the April 2026 revaluation. 

The Business Rates Valuation Account informs businesses about changes to their rateable value (RV), which is the figure that determines how much they pay in business rates. This happens every three years but this year will potentially coincide with more sweeping reforms. 

While firms will have to wait another month for the budget, forward planning, including setting up one of these accounts, is advised. This means SMEs are a little more prepared when the Chancellor makes her announcement whether the reforms go far enough or not.