£25bn business rates hike warning
Real estate adviser Altus Group outlined how the next business rates revaluation comes into effect on 1 April 2023 in April, based on an estimate of open market rents on 1 April 2021.
It stated while the revaluation will be revenue neutral and will raise no extra money for the Treasury, overall business rates revenue for 2023/24 will be hiked by September’s consumer price index (CPI), which soared by 10.1% in the 12 months to September 2022.
Altus has forecasted this will signal overall business rates revenue will increase by £2.72bn in England from next April without the Government stepping in.
Ridiculous policy
Altus Group UK president Robert Hayton said: “With more than one in 10 businesses now reporting moderation-to-severe risk of insolvency, the time has come to end this ridiculous policy of annually increasing upwards rates revenue by inflation through a renewed focus on growth to drive local taxation revenues instead.”
While the Bank of England expects inflation to start dropping next year and has a target of 2%, it doesn’t expect it to be close to that target for until two years’ time.
Even taking this into account, Altus predicted business rates revenue will grow to £159.18bn over the next five years, meaning cumulatively there will be a total increase of £24.63bn without Government intervention.
Utmost urgency
Amid the ongoing cost-of-living crisis, a number of voices from the pub sector have called on the Government to slash business rates.
Recently, the British Institute of Innkeeping (BII) wrote to the new Chancellor Jeremy Hunt, warning many pubs will be lost if the Government don’t step in.
As part of the letter, BII boss Steve Alton asked for a cancellation of businesses for 2023/24 and reduced VAT as a matter of “utmost urgency”.
