Business rates set to add £1.56bn to bills

Firms are urging the chancellor to freeze business rates in his autumn statement to stop an extra £1.56bn being added to bills.

Firms will pay an extra £1.56bn on their bills from next year unless business rates are frozen again, according to Colliers International.

Business rates are due to rise from April 2024. However, under the government’s ‘multiplier’, the rates will increase in-line with this September’s inflation as measured by the Consumer Price Index (CPI).

CPI is estimated to be at around 6 per cent for September – down 6.7 per cent from August. Analysis from Colliers International forecasts that business rates will rise from £26bn in 2023/24 to £27.56bn in 2024/25.

John Webber of Colliers International said that the rises are unsustainable: “All sectors are suffering from increased costs, from increased wage bills, materials or fuel,” he said. “They cannot cope with a hike in rates bills too.”

Forty-four British retailers have written to the chancellor ahead of his autumn statement in November, urging him to freeze rates again. They estimate that an extra £400m could be added to their cost base from next year if the rates aren’t frozen.

Webber thinks that the system as it stands, which yields about £25bn per year for local authority funding, “is unsustainable in its current form.”

A Treasury spokesman said: “The multiplier has been frozen for three consecutive years at an overall cost of £14.5bn. We have also provided 75 per cent relief for retail, hospitality and leisure properties, a tax cut worth over £2 billion for around 230,000 businesses. All taxes are kept under review.”

Chancellor Jeremy Hunt introduced the tax relief and business rates freeze during the autumn statement last year. It is believed that the current relief for retail, hospitality and leisure businesses will continue beyond 2024.

Read more

Business rates relief ‘likely’ to extend beyond April 2024 – Business rates relief for SMEs is ‘likely’ to continue into 2024/25. John Webber explains why this isn’t so good in the long run

How to challenge your business rates – It’s up to you to challenge if you think you’re being asked too much in business rates. And with 85% of his challenges being accepted, Steve Hughes of RVA Surveyors says it’s worth doing

Do I need to pay business rates working from home? – Nearly half of the workforce was working from home at the height of Covid. But do you need to pay business rates if you’re working from home?

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Anna Jordan

Anna is Senior Reporter, covering topics affecting SMEs such as grant funding, managing employees and the day-to-day running of a business.

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