Today the Office for National Statistics has announced that the Retail Price Index for September rose 3.2 per cent. This is the figure that will be used to calculate next year’s increase in the business rates.
Analysis for the BRC has shown that this increase in RPI will mean 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.
Additionally the tax increase will mean:
• An increase in business rates on retailers of £242 million per annum
• This puts 19,670 full time jobs at risk due to potential shop closures and reduced investment.
Helen Dickinson, British Retail Consortium Director General, 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.
“New analysis by the BRC shows that because of this increase, retailers are going to be paying £3.44 in business rates for every £1 they pay in corporation tax in 2014. That’s a rise from £2.48 in 2005 and demonstrates just how radically our tax system has changed and how hard our high streets are being hit.
“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.”