High street faces £1bn business rates increase next year
Business rates are anticipated to rise £1bn in England next year, unwelcome news for high street firms attempting to recover from the pandemic.
September’s Consumer Prices Index (CPI) signals the amount business rates will leap next April, according to analysis from the Altus Group, the country’s largest rating advisory body.
The CPI measure determines business rate rises for the following financial year, with the Uniform Business Rate (pence in the pound tax rate) increased in-line with the headline rate of inflation.
A headline inflation rate of 3.1 per cent suggests that gross business rates bills next year from April 1 will leap by £1.04bn.
Retail firms will take on £251.22m of that overall sum, triggering concerns over the Covid recovery of ailing high street businesses.
Without government intervention at the Budget, rates will rise by £23.15m for pubs while restaurants and cafes will see their liabilities increase by £21.87m, according to forecasts.
A rate increase would come hand in hand with the end of government pandemic support, with retail and hospitality firms presently in receipt of £6.1bn rates relief.
Rates relief will continue at reduced and capped levels until March 31 2022.
“Our clients tell us that the rates burden act as a disincentive to invest,” Robert Hayton, UK president of Altus Group, said.
He added: “The Chancellor must use the Budget to set stringent targets for the clearance of tens of thousands of outstanding challenges to facilitate the return of years of overpayments whilst also ending the ridiculous policy of increasing upwards the tax rates by inflation which are now at an unsustainable level.”