Retail and leisure giants face an extra £600m in business rates bills when the government’s “nuts” reforms come into force next April, according to Colliers.

From April 2026, the business rates multiplier will be lowered for smaller retail, hospitality and leisure properties, funded by increasing the multiplier on commercial properties with a rateable value of above £500,000.

Labour has pitched the reforms as a way of helping the high street, by shifting the tax burden from small businesses to online giants.

John Webber, head of business rates at Colliers, argued the reforms would deter businesses from pushing forward with property expansion and hiring plans.

“This whole new policy is nuts,” he said. “At a time when our high street is suffering with the cutting of reliefs for the small stores, the hike in employment costs and the increase in employer National Insurance contributions and the National Minimum Wage, why does the government think it is sensible to hit the bigger retail, hospitality and leisure players – the ones that provide anchor tenants for the high street, attract footfall and create the jobs – with an even more punitive business rates tax?

“And even the smaller retail, hospitality and leisure [RHL] businesses, who will be the beneficiaries of the lower multipliers, may find this is a hollow victory. This year, these stores faced cuts in business rate reliefs, which will be entirely removed next year. They too may well see steep rises in their rateable values in the new list, which will counter any benefits from the lower multiplier.”

Colliers has estimated that larger foodstores, as well as larger shops and retail warehouses, will see annual rises of over £400m in rates bills. The grocery sector will also be hit, with around 90% of the property portfolios of Tesco, Asda and Sainsbury’s sporting rateable values above £500,000.

London’s West End will be the hardest hit by the changes, with 451 RHL properties having to stump up £495m. In retail alone, new figures show there are 335 retail properties in the West End and Knightsbridge that are likely to exceed the £500,000 threshold. Annual liabilities for these properties are projected to jump from £212m to £274m a year – an average increase of £182,727 per property.

Webber added: “What we had hoped to see from Labour’s business rates policy was a lower multiplier across the board, rebasing it to a 35p-in-the-pound tax, something that all businesses could afford and that would stimulate growth and investment; and to simplify an already overcomplicated system.”

Las year, a coalition of the UK’s leading industrial and logistics firms warned the reforms risked damaging the sectors they were intended to support.