The retail sector will face more than £180m in additional business rates from next April, despite the ongoing high street crisis, new inflation figures confirmed today.
The latest ONS Consumer Price Index (CPI) figures reveal inflation in September stood at 2.4%.
This figure will be used to calculate the business rates multiplier for the next financial year and today’s confirmation of the additional burden has increased calls for the government to freeze business rates while it looks at a way to reform the system.
“These figures confirm that the retail industry, which is under significant pressure from public policy and a consumer and technology-led transformation, will face yet another eye-watering rise in business rates next April,” said Helen Dickinson, BRC chief executive. “The burden of the current business rates system, which is in urgent need of reform, is leading to store closures and hindering the successful reinvention of the retail industry.
“Ministers need to act to address this £180m increase in retailers’ already unsustainable business rates bill, along with other public policy burdens which retailers are struggling to absorb the cost of.
“We need a freeze in the business rates multiplier until the next revaluation to help save shops, protect jobs, and future-proof retail, and to give the government time to work with industry to reform the business tax system and make it fit for purpose in the 21st century.”
The blow to business comes despite Chancellor Philip Hammond announcing a £2.3bn reprieve in his autumn 2017 Budget by bringing forward plans to switch from the Retail Prices Index (RPI) measure, from April this year.
But Robert Hayton, head of UK business rates at Altus Group, said it had failed to stop the high street being “engulfed in crisis”.
“Since 2010, the average rates bill has risen by a fifth through the compound effect of inflation,” he said. “Brexit uncertainty is hurting both manufacturers and the services industries. It is time for the Chancellor to take a step back and support business through an unprecedented stimulus by freezing rate rises next April.”
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