The BRC has called on the government to halt further business rates rises, warning retailers face another large bill hike next year thanks to rising inflation.
The warning comes after new figures from the Office for National Statistics today revealed inflation was back on the rise for the first time this year, with prices increasing by 2.2% in the year to July, compared with 2% in the previous month.
It puts the headline inflation rate back above the Bank of England’s 2% target.
BRC director of insight Kris Hamer said that with the headline rate showing signs of rising further, and business rates calculated based on inflation in September, retailers faced another large rise in the tax bill from April.
“This penalises the retail industry, as retail products currently have generally lower inflation levels than the headline figure on which business rates rises are based,” said Hamer.
The ONS figure for food was unchanged at 1.5%.
Hamer said: “The government should buy into retail by ending the 14 years of Conservative business rates rises, which have seen the multiplier increase by a third since 2010, harming the viability of many high street stores across the country.”
It follows a call from union Usdaw and Sainsbury’s CEO Simon Roberts on Monday for the new Labour government to deliver on its manifesto promise to reform business rates.
“All responsible retailers want to pay their fair share of tax, but the current business rates system has become an enormous burden on our industry,” said Roberts. “It is no longer fit for purpose.”
Roberts and Usdaw cited a report by consultancy Development Economics to claim a 20% cut in retail business rates would increase tax revenues by £70m per year by allowing more stores to thrive and invest.
Labour’s manifesto pledged to replace the current business rates system with a new one that would raise the same revenue while levelling the playing field “between the high street and online giants”. It did not detail what the replacement system would be.
Usdaw general secretary Paddy Lillis said: “We are keen to work with government and business to ensure that business rates are replaced with a fairer system, which allows our high streets, towns and cities to thrive.”
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