September’s headline rate of inflation is set to cause more business rates increases in 2020, according to calculations from real estate advisers Altus Group.
The firm said the 1.7% uprating for inflation will add an additional £536m to the overall gross business rates burden. As a result, restaurants and hotels could both face increases in bills of £9.71m and £14.41m respectively. It added that pubs could shoulder a £12.77m hike.
The ONS’ Consumer Prices Index (CPI) measure of inflation determines business rate rises for the following financial year (2020/21) with the Uniform Business Rate (pence in the pound tax rate) uprated annually for inflation.
The current standard rate of tax for business rates in England rose to 50.4p on 1 April 2019 for 2019/20, the first time the tax rate for business rates in England has gone above 50%. When the national business rates system was introduced in 1990, the multiplier was set at 34.8p.
Alex Probyn, UK president of expert services at Altus Group, 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 £6.04bn 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.”
He added: “Business want and expect 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.”