Retail business rates are set to soar next April following a sharp increase in inflation.
September’s RPI, which is used to calculate the rate for next year, was announced at 5.6%, the highest for 20 years.
Retailers had to cope with a 4.6% increase in rates earlier this year and next April’s proposed rise has led to a call for a review of the business rates system.
The ACS (Association of Convenience Stores) has called on the government to take emergency steps to reduce this burden on retailers.
“A business rates increase of 5.6% will simply not be affordable at a time when growth is stalled,” said chief executive James Lowman. “The government has to delay this increase or allow a one-off emergency reduction in the rate of increase.”
According to the ACS, rates bills for typical neighbourhood or village local shops are around £6,000 per year, and would increase by over £300. Petrol forecourts and high street stores however pay much higher rates, often around £30,000 or more per year, which would translate to a £1,680 increase in bills.
It has calculated the total cost of a 5.6% rates bill increase to the 48,000 convenience stores in the UK would be around £30 million.
The British Retail Consortium (BRC) has also called on government to act on rising business rates. “Basing business rates rises on the previous September’s RPI is a lottery and retailers have just seen a losing number come up,” said BRC director general Stephen Robertson. “With trading conditions staying tough, an increase on this scale would have a hugely detrimental effect on retailers’ ability to invest and create jobs.
"The government should impose a much lower increase and, for the longer-term, review the system so that future increases are more predictable and more affordable.”