The way business rate increases are calculated makes no sense and is unfair on retailers

The BRC has today renewed its call for the government to make changes to the way business rates are calculated, saying that because the annual increase is calculated on the basis of the September RPI inflation rate - which is expected to be over 4% - retailers will face big rises next when it comes in next April. The BRC reckons rises could be as much as 22% once the end of transitional relief following this year’s revaluation is taken into account.

Business rates are a big cost to retailers, and their extensive property holidngs mean that retailers bear a disproportionate burden when it comes to their contribution relative to other types of business. Tying an annual increase into where the RPI - which by its nature is a very volatile measure - is at one point in time is not fair, but is also illogical as the RPI is affected heavily by the housing market and not how retailers are performing.

At a time when retail is one of the few sectors of industry creating jobs and prosperity, the government needs to be doing all it can to ensure extra burdens aren’t being loaded onto companies. These increases fall into that category and it would be a really positive step if the government could step in and say that it recognises that the increase as it stands would create hardship, and change the system accordingly.

 

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