Next month could be pivotal for town centres and high streets the length and breadth of the country as the Consumer Prices Index (CPI) measure of inflation determines business rate rises in England with the Uniform Business Rate (UBR – pence in the pound) updated annually for inflation.
The September CPI figure, released in mid October, is the one that is used for the purpose of annual rate rises for the following financial year. Gross business rates bills next year for 2020/21 would increase by £662.15 million overall in England according to the real estate adviser, Altus Group, if the headline rate of inflation remained unchanged at 2.1% in line with forecasts.
The retail sector would face a £169.14 million increase with pubs shouldering a £15.77 million hike whilst restaurants and hotels would both face increases in bills of £11.99 million and £17.80 million respectively.
The office sector will also be hard hit facing an inflationary rise of £155.76 million with factories having to stump up an extra £87.02 million.
Robert Hayton, Head of U.K. Business Rates at Altus Group, urged the new Chancellor Sajid Javid to be both “bold” and “pro business” when he delivers the Budget saying: “With major retail and hospitality businesses reducing their estates and headcount often citing high level of rates as a contributory factor, I urge the Chancellor to take the bold and ambitious step of being the first Chancellor to freeze the multiplier since the national business rates system was introduced in 1990.”
Hayton added: “It would be a positive message to business from the Johnson administration and a real statement of intent post-Brexit. It would help all other sectors too, such as manufacturing, who are also hurting.”
Business rates income has risen by £6.04 billion, up by almost a third since 2010/11, with £24.97 billion in England expected to be collected this financial year.