English firms are braced for a sharp rise in property taxes next year, with new analysis suggesting they face an “unavoidable double hit” that could push business rates bills up by £2.5bn.

Figures from the global tax consultancy Ryan indicate that a mix of inflation and government reforms to the rates system will add to the financial strain on companies already battling higher costs.

Business rates, the tax levied on commercial property, are devolved in Scotland, Wales and Northern Ireland but remain a central issue for firms in England – particularly high street retailers, leisure venues and manufacturers.

From April 2025, bills will be recalculated based on property values assessed in April 2024. The revaluation is intended to be revenue-neutral nationally, but the burden is redistributed across sectors and regions depending on how values shift.

Even so, overall yields will still rise in line with inflation. The September reading of consumer price index (CPI) inflation is used to set next year’s increase, and the Bank of England has forecast a climb to around 4%. Ryan estimates this alone would add £1.1bn to the business rates burden in England.

Compounding this, a supplementary multiplier of up to 10p will be applied from April 2026 on properties valued above £500,000, shifting an estimated £1.38bn of costs from government-funded retail and hospitality reliefs onto larger ratepayers. About 17,000 businesses are expected to be affected.

Alex Probyn, Ryan’s practice leader of property tax for Europe and Asia-Pacific, said: “The 2026 revaluation itself is a redistribution exercise, but when you layer on both inflation and the new supplementary multiplier, businesses are left staring down the barrel of an unavoidable double hit. Larger occupiers in particular will shoulder a disproportionate burden. With the UK already having the highest property taxes in the developed world, this £2.5bn increase risks undermining competitiveness at a critical time for the economy.”

Business groups have repeatedly warned that steep property tax bills threaten to hold back high street recovery and investment. The new figures will intensify pressure on the chancellor ahead of the autumn budget, where she faces calls to soften the blow with targeted reliefs.