RETAIL chiefs have demanded that the government changes the way it calculates business rates to help struggling shops to stay afloat.
The current rate is partly based on September’s Retail Price Index (RPI) which is expected to be around four per cent.
But the British Retail Consortium (BRC) has called on the coalition to find an alternative measure as the retail sector struggles to find its feet after the recession.
Some retailers would be hit with a 22 per cent rise in April, according to the BRC.
That is partly because of the end of a period of grace in which businesses were given some relief from steep rises because of the dire state of the economy. The business rate is pegged to the market rate for commercial property as well as RPI.
The BRC has written to the secretary of state detailing its fears if business rates are hiked at a time when consumer confidence is weak, with a looming jobs cull in the public sector.
BRC director general Stephen Robertson said: “One large retailer estimates every extra RPI percentage point could add £1.3m to their business rate costs.
“September’s RPI is expected to be above four per cent but few retailers have budgeted for increases as large as four to five per cent.
“We’re urging the Government to use alternatives to September’s RPI to calculate next April’s bills.”
BRC campaigning saw a one year exemption for empty properties with a rateable value of less than £15,000 in 2008.
This qualifying limit was later increased to £18,000 and extended.
This relief will last into 2011 but the BRC wants it extended again until 2012.
Robertson added: “The business rates blow will undermine retailers’ ability to create and maintain jobs and to contribute to the success of town centre regeneration projects. Retailers need more predictability and a permanent move to a more stable way of calculating business rates.”