Sequence simulators are fundamental tools in bioinformatics, as they allow us to test data processing and inference tools, as well as being part of some inference methods. The ongoing surge in available sequence data is however testing the limits of our bioinformatics software. One example is the large number of SARS-CoV-2 genomes available, which are beyond the processing power of many methods, and simulating such large datasets is also proving difficult. Here we present a new algorithm and software for efficiently simulating sequence evolution along extremely large trees (e.g. > 100,000 tips) when the branches of the tree are short, as is typical in genomic epidemiology. Our algorithm is based on the Gillespie approach, and implements an efficient multi-layered search tree structure that provides high computational efficiency by taking advantage of the fact that only a small proportion of the genome is likely to mutate at each branch of the considered phylogeny. Our open source software is available from https://github.com/NicolaDM/phastSim and allows easy integration with other Python packages as well as a variety of evolutionary models, including indel models and new hypermutatability models that we developed to more realistically represent SARS-CoV-2 genome evolution.