BRC and four other trading bodies have written to the chancellor ahead of the spring budget urging him to align business rates rise with April inflation rates – currently at 2%.
The BRC, the Association of Convenience Stores, British Beer and Pub Association, British Independent Retailers Association and UK Hospitality have all written to the chancellor asking him to align the business rates rise with April’s CPI.
At present, April’s rise is linked to September’s CPI bringing the business rates increase to 6.7% for retailers, hospitality and leisure venues, pubs and breweries.
The letter urged the Chancellor to instead use the Bank of England’s Q2 forecast for inflation – currently at 2%.
It said: “April’s rates rise should be based on April 2024 CPI rather than the level from seven months prior, when global cost pressures were still keeping inflation high. This would keep our business rates contributions in line with current changing prices, rather than introducing an inflationary rise. It would support our industries as they seek to drive greater investment in villages, towns and cities all over the country.”
The five trade bodies represent businesses in every part of the UK, employing 6.5 million people and together investing over £25bn annually.
Helen Dickinson, BRC chief executive, said: “April’s rates rise will be more than three times the expected inflation at that time. This means above-inflation cost increases for businesses, which will put significant upwards pressure on prices, jeopardising the current success in bringing down inflation. The government needs to fix this anomaly and make sure April inflation is the determinant of April’s rates rise.
“With retail on the line for an additional £400m in rates, it is inevitable that there will be renewed pressure on retail prices, as well as blocking much new investment in our town and city centres. It is essential that the chancellor uses the spring budget to make this change and give our local communities a fighting chance to thrive.”
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