The Association of Convenience Stores (ACS) has hit out at the government’s decision to increase business rates in April 2009 by 5%. The ACS said the government wrote to Billing Authorities earlier this month informing them of the rise. The rise was calculated on September’s Retail Price Index (RPI) rate, at the height of the market, which has since

fallen to 3%.

ACS chief executive James Lowman said: “This decision comes at the worst possible time for the retail industry. We are facing uncertain times and yet businesses are going to be hit with the biggest rate increase since 1990.”

The ACS wrote to the chancellor, Alistair Darling, prior to the Pre-Budget Report calling for business rates to be frozen at their current level.

Mr Lowman continued: “Freezing business rates is potentially one of the most beneficial things that the government can do for businesses right now. ACS will continue to push for business rates to be frozen and hope that the Government listens to the calls from the business community rather than imposing this massive burden at a time when it purports to be trying to help businesses through these difficult times.”

The Confederation of British Industry (CBI) estimated the hike would boost the government’s coffers by £400 million. The CBI’s director of business environment policy, Dr Neil Bentley, said: “This unnecessary jump in business rates will affect nearly every firm, and struggling retailers will be particularly hard hit, at a time when they need all the help we can give them.

“Pegging the increase to September’s record RPI rate – an 18-year high – enables government to raise £400 million in extra tax revenues from firms when they can least afford it.

“The CBI had called for a freeze in business rates, to give the economy a much-needed boost during these exceptionally difficult times. But councils will now have carte blanche to raise £1.15 billion pounds extra in business tax next year. This threat to jobs, investment and the survival of viable businesses can still be avoided if the government lives up to its promise of ‘doing everything it can’ by freezing next year’s rates.”