The British Retail Consortium has warned that UK business rates are likely to rise again next year.
The warning follows an announcement by the Office for National Statistics (ONS) that the Retail Price Index (RPI) for September rose by 3.2%. The RPI is the figure used to calculate business rates.
The BRC's director general Helen Dickinson warned that a further rate rise would mean more high street businesses struggling to survive.
She said: “Across the country today, retailers are adding up what this increase in the RPI will mean for the cost of their business rates next year. Many will be wondering whether they will be able to stay open. At the BRC we have spoken to retailers who will be forced to close shops because of the increase and many that have decided not to open new ones. This tax increase is likely to cost communities across the country 19,670 full time jobs. It is clear that the business rates system is no longer fit-for-purpose. It requires complete reform.”
She added that the BRC had conducted analysis which showed that the 3.2% increase in RPI will mean that for every £1 in corporation tax retailers pay, they will have to pay £3.44 in business rates. In 2005 it was just £2.48 per £1 in corporation tax.
Dickinson added: “That rise from £2.48 in 2005 . . . demonstrates just how radically our tax system has changed and how hard our high streets are being hit.”