The measure determines the business rate increase for the following financial year with the Uniform Business Rate (pence in the pound tax rate) increased annually in line with the headline rate of inflation.
Real estate adviser Altus Group stated today’s headline rate of inflation of 3.1% signals gross business rates bills next year from 1 April 2022 to 2023 will rise by £1.04m in England across the business sector, without Government intervention at the Budget this month (27 October).
Disincentive to invest
The business rates holiday is also set to end next year (31 March 2022), which has meant occupied retail, leisure and hospitality premises in England have received £6.1bn of business rate relief for 2021/22.
For restaurants and cafés in England, liabilities will increase by £21.87m according to forecasts from the real estate adviser.
Altus Group UK president Robert Hayton said: “Our clients tell us the rate burden act as a disincentive to invest."
He added: “The Chancellor must use the Budget to set stringent targets for the clearance of tens of thousands of outstanding challenges to facilitate the return of years of overpayments while also ending the ridiculous policy of increasing upwards, the tax rate by inflation, which are now at an unsustainable level.”
Meanwhile, trade body UKHospitality has listed a reform of the business rates system, including a lower rate for hospitality, as one of its asks to the Government at the Budget.
Chief executive Kate Nicholls said: “Of all the measures the Government could take to help the hospitality sector secure a more rapid recovery and rebuild resilience faster, the most effective would be to address the unfair business rates system, which requires the sector to overpay by 300% relative to its turnover; the £2.5 billion in rent debt accrued during the pandemic that currently weighs on the sector’s shoulders.”