High street bosses have warned that businesses could be forced to cut jobs and hours if the Chancellor raises business rates.
Analysts have said the new inflation figures could end up seeing around £500 million rise in business rates.
Colliers said on Wednesday that the rates bills rise in line with inflation every year and are based on the CPI figure for the previous September. With CPI announced today at 1.7% for September 2024, the total estimated income for government from business rates in England and Wales is expected to rise from around £29.4 billion in 2024/5 to £29.90 billion 2025/6 from next April.
This rise came on top of the 6.7% rise in business rates bills already faced by businesses in April this year.
Kate Nicholls, chief executive of UKHospitality, said: “These inflation figures confirm that hospitality is set for an eye-watering £914 million tax bill in April, if the Chancellor doesn’t act at the Budget.
“Business rates must be addressed, or venues at the heart of communities will see their rates bills quadruple and find themselves making awful decisions about whether to shorten hours, close more days, lay off staff, or even close their doors for good.”
Ion Fletcher, policy director at the British Property Federation, said: “Falling inflation is a good thing. But it still means a tax increase for hard-pressed businesses come next April, thanks to business rates being automatically increased in line with September’s figure.
“It’s simply not sustainable for business rates to rise every year regardless of rents and other property costs, or how well a business is doing.”
