BRITAIN’S SHOP TAX SHAME: Small firms face world’s harshest property burden

Britain’s small businesses are being hammered by some of the highest property taxes in the developed world, with new figures showing the UK now imposes a bigger property tax burden than France or Canada. Business rates are forecast to soar to £37.1 billion next year, leaving shopkeepers, cafés, trades and independent firms warning they are being taxed out of existence while high streets continue to decline.

The UK has just been crowned the most punishing major economy on Earth for property taxes and small and micro businesses are being bled dry.

New global analysis shows the UK now slaps a 3.7% property tax burden on its economy. That’s higher than France, and Canada, and second only to the US in raw cash terms.

The latest business rates reforms are set to pile on another £3.5 Bn in a single year, and small firms warn they’re being pushed to breaking point.

tax high street bomb

“WE’RE PAYING MORE THAN ANYONE AND GETTING LESS BACK”

The global tax firm Ryan found:

• UK property taxes equal 3.7% of GDP

• France & Canada equal 3.4%

• UK property tax revenue amounts to £102bn

• Only the US collects more

And when you look at property taxes as a share of total government revenue, the UK ranks third in the world.

For small and micro businesses, the shops, cafés, trades, workshops and high‑street heroes, this isn’t just a statistic. It’s a monthly bill that keeps going up while profits go down.

BUSINESS RATES SET TO ROCKET AGAIN

Business rates receipts are forecast to hit £37.1bn in 2026/27, up £3.5bn in a single year.

For small firms, that means:

• higher bills

• fewer staff

• delayed investment

• cancelled upgrades

• more closures

Many say they’re already on the brink.

UK IS ONE OF THE LEAST COMPETITIVE COUNTRIES FOR PROPERTY TAXES

The Adam Smith Institute says the UK is the second least competitive OECD country for property taxes beaten only by Italy, and the consequences are brutal:

UK investment in buildings and infrastructure is one of the lowest in the developed world. Small manufacturers are shelving expansion, and high streets are hollowing out leaving micro businesses unable to afford to grow. Tax on business property is costing business so much that they can’t afford to invest for growth.

Big corporates can absorb rising property taxes. Small firms can’t. For micro businesses, property taxes often cost more than rent. This hits independent shops and food outlets, trades people and workshops and any other small business that needs premises. Every extra pound in property tax is a pound not spent on people, training, equipment.

“HIGH‑TAX BRITAIN” IS STRANGLING GROWTH

Shadow chancellor Mel Stride said the figures expose the reality of a “high‑tax economy crushing investment and punishing enterprise.” Small firms agree and worry that the UK’s tax system is unpredictable, uncompetitive and unaffordable, and the constant rises in business rates are the final straw.

GOVERNMENT SAYS IT’S BACKING THE HIGH STREET

The government insists a £4.3bn support package and business rates reforms plus a 25% corporation tax cap and proposed red‑tape cuts are backing small businesses, but small firms say the relief is swallowed instantly by rising property taxes.

Every rise in business rates means fewer jobs, high‑street shops, start‑ups and local services and more closures. Small firms are crucial to the UK economy but they’re being taxed out of business.