Home Business News Boris urged not to break manifesto pledge with £700m rates hike

Boris urged not to break manifesto pledge with £700m rates hike

by LLB Finance Reporter
13th Sep 21 11:01 am

The Prime Minister, Boris Johnson is being urged not to rip up another tax pledge made at the 2019 General Election by increasing the tax burden on shops, pubs, restaurants, offices and factories as well as public sector buildings with a £700 million business rates hike in England next April. 

 

The Consumer Prices Index (CPI) measure of inflation for September, reported by the ONS in October, ordinarily determines business rate rises for the following financial year but rates have been frozen for the last 2 years due to the economic impact of the pandemic. 

 

Boris Johnson made a manifesto commitment in 2019 saying that a re-elected Conservative Government would lower the burden of business rates.

 

CPI rose by 2.0% in the 12 months to July 2021 which, if maintained in September, would signal that gross business rates bills next April for 2022/23 would rise by £667.81 million in England, of which £162.08 million would be shouldered by the embattled retail sector, according to forecasts from the real estate adviser Altus Group.

 

Robert Hayton, UK President at Altus Group, said, “there are real expectations that inflation will rise later this year potentially pushing those rate rises even higher” adding “ending the ridiculous policy of annually increasing upwards the tax rates and instead focusing on growth is a far better way for Councils to increase their local taxation revenues to fund local services honouring the commitment made.”

 

In 1990/91 when business rates in their current form were first introduced, the standard rate of tax for business rates in England was 34.8p, a rate comparable to other tax rates at that time. UK Corporation tax was 34%. Whilst Corporation tax today stands at 19%, in contrast, the standard rate of tax for business rates for the current financial year for 2021/22 is 51.2p, a near 50% increase.

 

Business rates are devolved to Scotland, Wales and Northern Ireland.

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