Without action by the Chancellor at the Autumn Statement on Wednesday, the commercial real estate intelligence firm Altus Group forecast the business rates bills in England will rise overall by £4.32 billion for the 2024/25 financial year.
This will be a ‘double whammy’ of property taxes increases with the 75% discount for occupied retail, leisure and hospitality premises coming to an end and an annual uplifting for inflation across all asset classes.
Business rates are devolved to Scotland, Wales and Northern Ireland.
September’s Consumer Prices Index (CPI) measure of inflation, the headline rate of inflation, signaled a £1.95 billion business rate rise in England next April for the 2024/25 financial year without intervention from the Chancellor at his upcoming Autumn Statement on Wednesday.
At the Autumn Budget in 2017, the Government switched the annual uplifting of business rates for inflation from the Retail Price Index (RPI) to the lower headline rate of inflation (CPI) in the preceding September from 1st April 2018.
CPI rose by 6.7% in the 12 months to September 2023, unchanged from August.
The commercial real estate intelligence firm Altus Group forecasts that September’s headline rates of inflation will signal that gross business rates bills will rise by £1.95 billion in England next April, of which £415 million will be shouldered by the embattled retail sector which has shed around 67,500 jobs so far this calendar year to the end of October.
‘Double whammy’ for retail, leisure & hospitality
Last year’s Autumn Statement which froze rate rises also saw those businesses occupying retail, leisure and hospitality premises granted a 75% business rates discount up to a cash cap of £110,000 per business.
This discount was only a one-year commitment to be applied for 12 months from 1st April 2023 and is set to expire on 31st March 2024 with Altus Group forecasting the cost of that discount at £2.37 billion warning of a ‘double whammy’ tax rise in business rates of £4.32 billion next April.