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.
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