Business rates bills could increase by up to £1.74bn next April, to around £27.74bn, according to new data from Colliers.
Rates bills rise in line with inflation and are based on the CPI figure for the previous September. With the CPI announced yesterday at 6.7 % for September 2023, business rates will rise from around £26bn in 2023/4 to £27.74bn 2024/5 from next April unless the government steps in and intervenes as it did for the current tax year.
Retail will be the sector hardest hit by the rise with retailer’s rates bills expected to increase by around £366m in April – the same month business rates reliefs come to an end. Colliers estimates the logistics/manufacturing sector will see its rates bill rise by around £453m in April with the offices sector expected to face an additional £401m bill.
John Webber, head of business rates at Colliers, said the rises are unsustainable. “All sectors are suffering from increased costs, whether from increased wage bills, materials or energy costs. They cannot cope with the hike in rates bills too. Higher occupation costs will only dampen expansion and growth plans and for many businesses might be the last straw. The government must do something.”
He continued: “Freezing the multiplier for 2024/5 is the first step, but only really papers over the issues. Ultimately, we need proper business rates reform, primarily by the government rebasing the multiplier to a level that businesses can afford- say 34p in the £ and reforming the sticking plaster relief system- so that every business contributes something for their local amenities.
“It is desperately disappointing that at neither the Conservative nor the Labour party conferences was there any real mention of what to do on “the business rates question. With rises of over £1.74bn looming next year, we are fearing a ‘head in the sands’ approach yet again by both parties. This clearly needs to change – and soon.”
