England’s high streets and town centres could see business rates increase by almost £759m next year, according to ratings experts.
From September, the government will ditch the current Retail Price Index (RPI) measure for the Consumer Price Index (CPI) to calculate business rates for the next financial year.
The CPI figure is currently at 2.5%.
According to real estate advisor Altus Group, a 2.5% uprating in business rates for 2019/20 would add £758.55m to the overall gross business rates burden.
Read more about the current state of UK high streets:
- How smaller retailers can stand out on a changing high street
- Why physical picks beat virtual kicks in today’s chaotic retail landscape
- Government urged to save high street with 50,000 jobs lost in 2018 alone
Britain’s retail sector alone would face a £194.22m increase. Industries like manufacturing would shoulder £159.27m, and the office sector would face a £181.65 increase.
The remaining sectors, classified by government data only as “other”, will pay the £223.41m balance.
Over the last 10 years, business owners have seen rates increase by a third, or £6.04bn. Business rates income is expected to reach £24.8bn in England this year.
Commenting on the threat of a business rates increase, Robert Hayton, head of UK business rates at Altus Group, called on chancellor Philip Hammond to freeze any increase to rates.
“With our high streets engulfed in crisis and Brexit uncertainty hurting manufacturers and the services industries, the chancellor should be bold within his Autumn Budget later in the year through an unprecedented stimulus by freezing rate rises,” he said.
In his Autumn 2017 Budget, Hammond attempted to appease concerns by bringing forward the switch to the RPI two years earlier, representing a £2.3bn reprieve for business owners.
This week, the chancellor tabled the idea of a so-called “Amazon tax” to level the playing field between online retailers and high street businesses.
However, some retailers argued this would do nothing to alleviate the business rates burden, and called on Hammond to deliver stronger reform to the system.
Read more about business rates:
- The business rates loopholes your small company should know
- The business rates appeal process – Paying over the odds for your premises?
- One founder a week faces 90-day prison sentence for unpaid business rates
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