The BRC has warned that retailers face a £137m business rates hike from next April based on the latest figures from the government’s consumer price index (CPI), which will pile more pressure on the sector.

The Office for National Statistics (ONS) reported that in the 12 months to September 2019, the CPI increased 1.7%. The September CPI figure determines business rate rises for the following financial year.

In response, the BRC said the increase will “reduce the ability of retailers to invest in their business, their staff and shops” and called on the chancellor to take action on business rates at the upcoming budget.

BRC property policy adviser Dominic Curran said: “Today’s CPI announcement means retailers will have to cough up an extra £137m from April. Already, while retail accounts for 5% of the economy, it pays a massive 25% of all business rates.

“This £137m increase will reduce the ability of retailers to invest in their business, their staff and their shops. The chancellor must take action on rates in the forthcoming budget and scrap ‘downwards transition’, which takes £1.3bn from retailers and uses most of it to subsidise rates in other industries. Meanwhile, with the retail industry facing store closures and jobs losses, the government should freeze the impending business rates increase.”

The BRC also noted that legislation designed to increase the frequency of revaluations, which would bring the estimated rental values more in line with actual rents, “fall at prorogation earlier in October” and was not revived at the recent Queen’s speech.

The current standard rate of tax for business rates in England rose above 50% for the first time in April this year, according to property advisers Altus Group.

UK president of expert services at Altus Group, Alex Probyn, said: “The compound effect of annual inflationary rises are completely unsupportive of UK businesses. Revenue from rates has risen by almost a third in England, up by £6.04 billion a year, during the last decade.

“Firms would greatly benefit from respite from increasing property taxes that are both uncompetitive and the highest across Europe. Business wants and expects the chancellor to deliver a pro-business autumn budget amid these uncertain times and Sajid Javid could do that, in part, by being the first chancellor in history to scrap the inflationary rise next year.”

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