Retail businesses in Britain could have to shoulder the burden of a £200m rise in business rates in 2019 because of the level of inflation last month.
That’s according to a report by property adviser, Colliers International, which claims that 2.4% inflation will add around £600m to overall gross business rates from April next year, with retailers baring a heavy sum.
Business rate rises from April each year are linked to the CPI figure for the previous September.
Over the last 10 years, business owners have seen rate increases by over a third. Business rates income is expected to reach over £25bn in England this year.
John Webber, head of business rates at Colliers International, said such rises are “unsustainable” and called on the Chancellor to introduce far reaching business rate reform in the forthcoming Budget.
On the immediate front, to freeze business rate rises for the next year – not the 49% for top rises as currently planned.
“Businesses will have already have had to swallow a rise of 74% plus inflation in the last two years- further increases are unsustainable,” he said.
Webber also called for an immediate removal of downward phasing enabling ratepayers to pay their true rates liability now and not wait four years to do so.
“This could well impact on several decisions to either close or keep open stores in a number of regional high streets.”
Colliers has calculated that more than 30 ‘sizeable’ retail/restaurant chains (of 10 stores or more) have gone into CVA or administration since the beginning of the year, including names like Toys R Us, Carpet Right and House of Fraser.
According to figures published by ONS, retailers have had their worst start to the year for five years.
“Given the crisis on our high street and uncertainty over Brexit affecting confidence in most sectors, the Government really needs to get a grip on business rates reform and not put it in the ‘too difficult box’,” added Webber.