The convenience retail sector could be hit with an increase in business rates totalling nearly £26m next April, following today’s announcement by the Office of National Statistics of a Retail Price Index of 3.2% for September 2013.
In response, the Association of Convenience Stores has called on the Chancellor to take immediate action to lift the burden on retailers. The rate remains higher than the Government’s target of 2% and is an increase on last year’s 2.6% hike.
ACS estimates that the upcoming increase for 2014 will cost retailers £25.8million.
ACS chief executive James Lowman said: “Continuing unpredictable increases in business rates have put unnecessary pressure on businesses and stifled investment at a time when growth is desperately needed. The Chancellor must not ignore the collective voice of thousands of businesses calling out for change. We need a new system for setting the rates increase and a cap on increases that provides retailers with certainty when planning for the future. Root and branch reform of the rates system is crucial to ensuring that small businesses are able to invest.”
The business rates increase for April is currently set by the previous September’s rate of RPI. In 2011 and 2012, the September RPI was set at 5.6% and 2.6% respectively, costing convenience retailers in excess of £50million over the last two years.
Katja Hall, CBI chief policy director, also commented on the likely impact on business rates: “This level of RPI could lead to another business rates hike in April.
“We already have one of the highest commercial property taxes of any EU country, so the Government must step in at the Autumn Statement to limit next year’s business rates increase at 2%.
“We then want to see a full review of the system to explore options for longer term reform.”