Self-storage leader Big Yellow Group has issued a stark warning to investors, revealing its annual business rates bill is set to surge by a significant £1.8 million next year. The hike is a direct consequence of tax changes announced in Chancellor Rachel Reeves's autumn Budget.
Budget Changes Target Larger Properties
The company stated it will be impacted by an upcoming overhaul of the business rates system, confirmed in the Budget on Wednesday 3 December 2025. The new framework, effective from the next financial year starting in April 2026, will impose higher rates on commercial properties with a rateable value exceeding £500,000.
Big Yellow anticipates its total rates bill for the 2026/27 tax year will reach nearly £23 million, marking a sharp increase from its current liability. The firm identified that 27 of its stores across its portfolio will fall under the new, higher tax bracket due to their property values.
Appeals and Sector Rebalancing
In response to the impending cost increase, Big Yellow has confirmed it is actively appealing the rateable values assigned to some of its storage locations. The company operates from 111 sites across England, Scotland, and Wales.
The Treasury has defended the policy shift, framing it as a necessary rebalancing act. The reform will see rate multipliers reduced for sectors like retail, hospitality, and leisure. This relief for smaller high street firms is to be funded by the increased charges on larger commercial properties, which include warehouses and big-box storage facilities.
Broader Implications for Commercial Landlords
This move signals a clear intent from the government to shift more of the business rates burden onto larger operators. While aimed at supporting smaller businesses, the change presents a substantial new financial pressure for companies with extensive property portfolios like Big Yellow.
The announcement has placed commercial property tax firmly back in the spotlight, with industry watchers now keenly observing how other major warehouse and logistics operators will be affected by the forthcoming revaluation and multiplier changes.
