Around 55,000 retail related premises in England are set to endure further hikes in their bills thanks to a another business rates rise in April.
According to real estate advisory firm Altus Group, retailers are preparing for tax rises above the rate of inflation next month for the property taxes that they pay through rates to their local councils.
The firm said business rates bills began hitting doormats last month but 55,467 premises will see tax rises of more than three per cent when demands for the 2018/19 fiscal year become due for payment in April.
Chancellor Philip Hammond sought to appease concerns over last year’s business rates revaluation, announcing a £2.3 billion reprieve in his Autumn Budget by bringing forward plans to switch the inflation measure used to calculate annual increases from 2020 to April.
This means that business rates will now increase annually in line with September’s lower Consumer Price Index (CPI) of three per cent.
However, under the revaluation that came into effect in April last year, transitional relief means that there will be large and gradual increases to bills in England over the five years of the new tax regime.
The “caps” for 2018/19 limiting increases in bills are 7.5 per cent for small properties, 17.5 per cent for medium-sized and 32 per cent for large properties – plus the three per cent rise from the CPI.
Altus Group’s analysis shows 35,600 small retail premises, 17,399 medium medium-sized and 2468 large retail properties in England will be hit with tax rises greater the CPI, meaning equating to a total tax rise of £154.8 million.
Meanwhile, 2211 large shops face average tax rises in business rates of £35,363 each, totalling £78.19 million.
“Historically, the spring is when Chancellors have made key fiscal decisions so it’s not too late for a freeze in inflationary rises to help cushion the blow for those in transition amidst challenging trading conditions,” Altus Group UK business rates president Alex Probyn said.
The news comes amid a challenging time for the UK high street.
Toys R Us UK and Maplin both collapsed into administration, threatening over 5000 jobs.
Meanwhile, Mothercare admitted it was in talks with its banks and New Look has proposed a company voluntary agreement that could see it close up to 60 stores and make 980 stuff redundant.
Shares in Carpetright have also hit an all-time low after it issued its third profit warning in just four months, House of Fraser and Debenhams have been underperforming, and the Big 4 grocers announced fresh rounds of job cuts in January.