Convenience stores can expect to pay £500-£750 extra a year in business rates from next April due to a higher increase cap and high inflation.

The RPI measure of inflation is currently at 3.9% and this will be added on top of next year’s 7.5% rates increase cap for small properties. In effect this means an 11.6% overall increase for the highest rated small format stores.

37,364 small shops will see above inflation increases, and the large majority, 30,198 will see overall rates increases of over 10%. The average increase for convenience retailers will be £683. This applies to all shops with a rateable value of less than £28,000 in London, or £20,000 anywhere else in England.

The increases will be heavier for larger stores, with those falling into the medium rateable value category (up to £99,999) facing a 17.5% plus RPI increase in rates. This averages out as £2,677 per year, per medium rateable premises.

Chancellor Phillip Hammond hinted that rate changes are coming in the upcoming Autumn Budget, and CEO of rates specialists CVS, Mark Rigby said the changes should be “bold”. He writes: “Business investment has slowed and confidence fallen. Against this backdrop we already have the highest property taxes not only in Europe but the world. The Chancellor must be bold within his upcoming Budget next month through an unprecedented stimulus of freezing rate rises in April 2018.”

The current 3.9% inflation rate will cost British businesses £1billion in additional business rates in 2018. Rates relief will also be reduced, with the total pot of discretionary rates relief falling from £175million for 2017 to £85million in 2018.

Describing business rates as “challenging” for many small businesses, High Streets Minister Jake Berry said: “We made a clear commitment in our manifesto to review business rates, the review will be ongoing and the inflation figures will form part of this.”