Forty-four retailers have written to the chancellor ahead of the Autumn Statement as business rates bills are set to rise, leading to ‘unsustainable rises’ to all sectors, according to Colliers.
The letter was coordinated by the British Retail Consortium.
Last year, the Fed called for an axe to the business rates multiplier in fear it would cost jobs, harm the economy and damage the ‘vibrancy’ of town and city centres. Chancellor Jeremy Hunt then froze the multiplier for the current tax year, keeping it at 51.2p for every £1 of a commercial property’s rateable value, and 49.9p for small businesses.
Business rates changes to impact all store owners
This year, retailers are calling on Hunt to do the same again as the tax multiplier could result in £400m added to retailers’ cost base.
Business rates are set to rise in April 2024 in line with the inflation figure for September. This figure is due to be announced in October and is currently forecast at about 6%.
Retailers’ rates bills are based on CPI figures from the previous September. Businesses generally are expected to pay an extra £1.56bn in rates bills.
John Webber, head of business rates at Colliers, said: “All sectors are suffering from increased costs, whether from increased wage bills, materials or energy costs. They cannot cope with the hike in rates bills too.
“Higher occupation costs will only dampen expansion and growth plans and for many businesses might be the last straw. The government must do something. Freezing the multiplier for 2024/5 is the first step, but only really papers over the issues. Ultimately, we need proper business rates reform.”
Webber added that the current system provides £32bn gross (£26bn net) for local authority funding, and it is ‘unsustainable’ in current form, with the main issues being that rate bills are ‘too high and increasingly unaffordable’ for many businesses.
Colliers is calling for a rebase of the multiplier, to a level businesses can afford, reform the ‘sticking plaster reliefs system’
Fears of the business rates multiplier costs join concerns of ‘soaring’ operating costs on streets with vacant buildings, as well as a spike in retail crime.
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