The High Street looks set to pay millions more to the Treasury in Business Rates, says the British Property Federation (BPF).
Following news that inflation has hit 5.6 per cent, the current system will use September’s RPI to calculate the annual increase in commercial property taxes introduced next April.
With RPI hitting 5.6 per cent – the highest monthly rate since 1991 – an additional £350 million will be ‘siphoned’ from the High Street to the Treasury, so says the British Retail Consortium.
The BPF said that linking business rates to RPI means they have doubled over the past two decades and urged the Government to hav a fixed uplift instead to provide stability for the High Street.
“This is bad news for retailers, landlords and the economy and comes at a time when many High Streets are fighting for their survival,” explained Ian Fletcher, director of policy at the British Property Federation.
“At the very least the Government should not be making a windfall from business rates. It budgeted its sums on the basis of 5.2 per cent this year and should be giving the difference back. “When finances allow the Government should also be considering two further reforms. The first to reinstate empty property relief – empty rates are an unjust tax on people deriving no income and who will be paying even more out now as a result of today’s inflation figure.
“Secondly, linking business rates to RPI has meant they have doubled over the last 20 years and Government should provide greater certainty for businesses by fixing the business rate uplift each year, which we have suggested should be at the rate of the inflation target, currently 2 per cent.”