Basing next year's business rates on the September Retail Price Index figure announced yesterday would hit retailers with £175m in extra costs, posing a significant threat to the health of our high streets.

Retailers demand freeze on business rates

Basing next year’s business rates on the September Retail Price Index figure announced yesterday would hit retailers with £175m in extra costs, posing a significant threat to the health of our high streets.

Retailers demand freeze on business rates

So says the British Retail Consortium, which has issued a stark warning that a 2.6% increase in rates in April 2013 would seriously impede retailers’ ability to invest and create jobs. It points out that business rates have already risen dramatically – by 4.6% in 2011 and 5.6% this year, a cumulative increase of more than half a billion pounds.

The BRC is calling on the government to freeze business rates next year in order to support jobs and growth during tough trading conditions. It says retailers already pay 28% of all business rates.

The consortium wants government to honour its commitment to review the mechanism for setting rates increases, and is pushing for a system that bases business rates increases on an annual average of the Consumer Price Index rather than what it calls ‘the lottery’ of taking only September’s RPI.

The British Property Federation has added its voice to retailers’ call for a change in the method of calculating business rates. It has long argued that what businesses need is certainty rather than an RPI figure that varies significantly from year to year.

Ian Fletcher, director of policy at the British Property Federation, said: “Today’s [Tuesday’s] lower RPI figure than in previous years shouldn’t detract from the need to reform the way business rates are calculated.

“Linking business rates to RPI has meant they have doubled over the last 20 years and government should provide greater certainty for businesses by fixing the business rate uplift each year in line with the 2% inflation target.”

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