Experts are urging Chancellor Philip Hammond to freeze rises in commercial property tax bills in next month’s spring statement after figures revealed above-inflation hikes are hitting nearly a quarter of a million business premises.
After business rate bills began hitting doormats across England last week, new figures from real estate adviser Altus Group reveal that over 242,000 firms face rises of more than 3% in their business rates from April – with nearly 52,500 suffering increases of more than 20%.
It comes despite Mr Hammond’s pledge in the November Budget to bring forward the switch in the inflation measure used to calculate annual increases from 2020 to this April.
This meant that business rates would increase annually in line with September’s lower Consumer Price Index (CPI) of 3%.
Jamie Oliver’s restaurant chains have been hit by huge business rate rises (PA)
But due to phasing in of the recent revaluation changes – which saw crippling rate hikes for thousands of firms – many firms will see rises far greater than inflation.
Alex Probyn, president of Altus Group, said it was “not too late” for Mr Hammond to freeze further rises in rates in his spring statement.
He said: “The past few months have seen a stream of collapses across both the retail and hospitality sectors with many others teetering on the brink or considering large scales closures.”
“Historically, the spring is when chancellors have made key fiscal decisions so it’s not too late for a freeze in inflationary rises to help cushion the blow for those in transition amidst challenging trading conditions.”
Analysis of government data by Altus found that 119,665 small premises, 110,502 medium sized premises and 12,107 large premises will all see tax rises greater than last September’s 3% CPI rate totalling business rate rises of £712.75 million.
The phased-in transitional relief also means 52,483 properties will see rises in their rates bills of over 20%, while 9,235 will see rises of more than 30%.
Business rate hikes have been blamed for adding pressure to firms in the retail and leisure sector in particular, with celebrity chef Jamie Oliver the latest to fall foul.
His restaurant chains have been hit by huge bill rises, forcing him to close one of his London Barbecoa eateries and buy out the other in a rescue deal.
Recent figures showed the Government is set to cash in to the tune of £25 billion as it reaps the rewards of last year’s controversial business rates revaluation.
The amount of money raked in from businesses by local authorities in England is set to rise by £845 million to £24.8 billion for 2018/19.
The business rates overhaul on April 1 saw 1.9 million properties in England revalued and left many businesses facing eye-watering increases.
Independent forecaster the Office for Budget Responsibility revealed that £4.5 billion has been set aside to cover tax rebates across England over the next five years.
But appeals under the new Check, Challenge, Appeal system reached 12,840 in the first nine months, compared with 169,300 during the first full year of the previous regime, according to data earlier this month from the Valuation Tribunal Service.