The Treasury is studying ways to reduce the burden of business rates as the Government comes under pressure from retailers ahead of this month’s Budget.

Treasury Minister David Gauke has written to the British Retail Consortium confirming he will look at redefining how rate increases are measured, the Mail on Sunday reported.

Gauke is considering whether to raise rates in line with the Consumer Prices Index rather than the higher Retail Prices Index.

The BRC and Retail Week’s Fair Rates for Retail campaign calls on Government to freeze business rates this year, which threatens to add £175m to their bills this year.

Retailers have had to pay an additional £500m in business rates as a result of two consecutive years of onerous rates rises.

Chancellor George Osborne has come under increasing pressure to address the issue in his Budget, which is due later this month as bricks-and-mortar retailers compete with online retailers paying less tax.

Kingfisher chief executive and BRC chairman Ian Cheshire said today that, were it not for long-term leases, he would close a quarter of the DIY retailer’s stores due to the tax burden, The Guardian reported.

He said: “We do pay our taxes [for the] public good. But online retailers are not facing the same tax take. For the Treasury, there is a danger that their tax base is going to disappear.”