Following Wednesday’s headline rate of inflation is set to cause yet more business rates increases, Altus Group says this is putting English high streets under further pressure.
September’s Consumer Prices Index (CPI) measure of inflation determines business rate rises for the following financial year (2020/21) with the Uniform Business Rate (pence in the pound tax rate) uprated annually for inflation.
The current standard rate of tax for business rates in England rose to 50.4p on 1 April 2019 for 2019/20, the first time the tax rate for business rates in England has gone above 50%. When the national business rates system was introduced in 1990, the multiplier was set at 34.8p.
Today’s headline rate of inflation of 1.7% signals that gross business rates bills next year for 2020/21 will increase by £536.03m in England according to calculations from the real estate adviser, Altus Group.
Altus Group say that the embattled retail sector will face a £136.92m increase with pubs shouldering a £12.77m hike whilst restaurants and hotels will both face increases in bills of £9.71m and £14.41m respectively.
The office sector will also be hard hit with an inflationary rise of £126.09m with factories having to stump up an extra £70.44m.
Alex Probyn, UK President of Expert Services at Altus Group said, “The compound effect of annual inflationary rises are completely unsupportive of UK businesses. Revenue from rates has risen by almost a third in England, up by £6.04bn a year, during the last decade.
“Firms would greatly benefit from respite from increasing property taxes that are both uncompetitive, and the highest across Europe. Business want and expect the Chancellor to deliver a pro business Autumn Budget amid these uncertain times and Sajid Javid could do that, in part, by being the first Chancellor in history to scrap the inflationary rise next year.”