Retailers across the UK are facing the prospect of a £280m hike in business rates next year, raising fears of “fewer shops and fewer jobs.”
Figures from the Office for National Statistics revealed that Retail Price Inflation (RPI) rose 3.9% in August – and September’s rate, which will be used to determine business rates next April, is expected to surpass 4%.
Retailers are already grappling with a host of cost headwinds, including the national living wage, the apprenticeship levy and rising sourcing costs following the fall in the value of the pound.
But the British Retail Consortium (BRC) has warned an increase in “already onerous business rates bills” would “make life tougher for high streets.”
A number of retail leaders including Sainsbury’s chief executive Mike Coupe, Theo Paphitis and The Entertainer’s Gary Grant have all lobbied for changes to the “archaic” tax.
And the BRC’s director of business regulation Tom Ironside said the government should engage with the industry to create a “more affordable and sustainable” business rates system.
Ironside said: “Retailers are staring down the barrel of a hefty £280m hike in their business rates bills from next spring.
“It is highly questionable whether communities across the UK can afford a spike in business rates of this scale and any resulting loss of commercial investment will contribute to fewer shops and fewer jobs.”
He added: “With the economy slowing, consumer spending facing headwinds and retailers responding to profound changes in shopping habits, the prospect of a further investment-sapping tax rise of this magnitude is deeply worrying and will only serve to make life tougher for high streets.
“Government should knock on the head any notion of a bumper rise in rates next spring and work with the retail industry and business to put the rates system on a more affordable and sustainable footing.”