While Leicester City Council writes off almost £3m in unpaid business rates from the Highcross Shopping Centre, a city centre pub is closing its doors partly due to high tax demands and says the situation is “not fair”.

Following reports of multimillion-pound losses, Leicester’s flagship mall was taken over by Savills in 2023. Two years later, in September 2025, the company went into voluntary liquidation.

Although business continued as normal, Highcross Shopping Centre Ltd owed Leicester City Council roughly £2.8m in unpaid business rates.

However, according to the authority’s recent financial reports, the debt has been written off. 

The news comes as pubs across the city become increasingly frustrated with the high business rates they are forced to pay. 

Sam Hagger, founder of The Beautiful Pubs Collective, which operates four venues in Leicester, revealed that one of his pubs will soon be closing due to “economic challenges” including business rates.

The Grade-II listed Knight & Garter on Hotel Street opened in 2017, forming the cornerstone of the wider market quarter regeneration, but will close later this year.

He said: “I did think that there would be some kind of bad debt that the city would pick up, and obviously it’s really disappointing.

“Smaller businesses do everything they can to pay their bills as they ultimately try to keep food on their families’ tables. 

“All of my pubs have high rateable values. It’s a massive amount of money. We still have an obligation to pay them and we can’t just write the debt off and pretend like nothing happened. 

“£3m could have a massive impact on our city. That money could have been invested in a whole host of things. I don’t think it’s fair.”

Another issue affecting the soon-to-close pub is the city council’s huge excavations at the historic site, which have created “slowing footfall”.

He added: “Whilst Knight & Garter has continued to trade successfully and we remain passionate ambassadors for Leicester, the social, economic and infrastructure challenges within the immediate area have made it increasingly difficult to grow sales at the pace required to offset the significant inflationary pressures currently facing the hospitality sector.

“We remain incredibly proud of everything that Knight & Garter represents, and we are now actively exploring a number of opportunities to rehome this much-loved proposition in a location that offers the long-term sustainability and growth potential the brand deserves.

“14 Hotel Street still has huge potential, and we are confident Everards will receive considerable interest as they seek a new operator for the venue.

“This is not the end of Knight & Garter; rather, it is another chapter in its story.”

Explaining the ongoing situation at the Highcross, Larking Gowen liquidator Lee Green said the owners of the shopping centre would have borrowed some money for the original purchase. 

But as the property value fell during the pandemic, a breach in the banking covenant was triggered, so it was handed over to receivers to run. 

Mr Green said they are now looking to sell the centre, but estimates there will be a shortfall of around £24m, making it more of a liability than an asset.

A spokesperson for Savills said: “Directors Matthew Nagle and Kevin Mersh were appointed as joint Fixed Charge Receivers in 2023 and since that time it has remained very much business as usual at the centre.

“Their role has been to continue to improve the shopping experience for the public by enhancing the tenant mix and bringing more occupiers to the centre. As part of this they are working closely with the on-site team to identify opportunities moving forward to augment the centre further.”

A Leicester City Council spokesperson said: “We have continued to collect business rates from occupied units at Highcross, but following the insolvency of Highcross Shopping Centre Limited, we have been required to write off debt relating to unoccupied units for which the company was liable.

“This is in line with the standard process when a business enters insolvency and there is no legal means of recovering outstanding debt. Business rates due in respect of occupied units have been paid by the company.

“Highcross Shopping Centre is a vital part of the local economy and the city centre, playing an important role in supporting employment, attracting visitors and investment, as well as underpinning the city’s wider retail and leisure offer.

“Recent improvements have led to an increase in new businesses moving into the centre, helping to strengthen its long-term future and its contribution to Leicester’s economy.”

Written by Caitlin James (Local Democracy Reporter)