The latest Retail Price Inflation (RPI) figures, published yesterday by the ONS, could lead to an additional €336.18m (£300m) being added to the tax bills of UK retailers unless Government finally addresses the UK’s unfair and outdated business rates system in the upcoming Budget in November.
Inflation in September stood at 3.9% and this rate will be used to determine the increase in business rates next April.
Revo, which represents around 2,300 businesses, organisations and individuals in the retail property sector, is calling on Government to implement a 2% cap on the rise in business rates, in line with the Bank of England’s target rate for inflation.
While the Government has committed to moving business rates to CPI indexation in 2020, UK plc is already suffering under the weight of the highest property taxes in the OECD, putting British business at a distinct disadvantage, and businesses are still recalibrating following the impact of the latest delayed revaluation.
Ed Cooke, Chief Executive of Revo, said: “This rise in inflation utilising an obsolete index, which still determines business rates increases, comes at a time when many businesses are already struggling with the fixed costs of operating in the built environment. To make sure that Britain really is open for business, we need to be making decisions that will protect and support our town centres, high streets and other urban areas, not penalise them. The Chancellor must act with immediate effect in the upcoming Budget by capping any rises to 2%, and by working with industry partners to solve the inequity of taxes placed on our built environment at a time of profound political and economic upheaval. His predecessor responded to calls for a cap when inflation was around the same level in 2013, so there is a clear precedent for this.”