CPI figure could mean extra £662m business rates bonus for Chancellor
Speculation is mounting on what the business rates increase will be for UK firms when the figures for the current rate of inflation are announced later this month.
Predictions vary but conservative estimates put business rate rises at around £662m for next year, if the current rate of inflation (2.1%) doesn’t change before September’s Consumer Price Index figure is revealed.
That’s the figure that will be used to determine annual business rate rises for the 2020/21 financial year. Expect more lobbying by the retail sector which faces an increase of around £162m based on these projections, and still no announcements on what’s happening with the ongoing Parliamentary review into the business rate system.
Chancellors Sajid Javid laid out his spending plans earlier this week – easy to miss amongst the tumultuous Brexit debates that are preoccupying the media – but no announcement on business rates from his camp or any other Government department were made, or buried.
There have been calls for the Chancellor to freeze the multiplier to give retailers in particular a bit of breathing space in a possible post-Brexit world but, then again, another £662m to spend next year could be very welcome if we are facing a recession.
If we are also heading into another General Election in the next few weeks/months then it looks likely that the business rates status quo will remain in place and the current powers-that-be will not want to set a precedent they may have to perpetuate if they are still in power. If Labour win then who knows what would happen with John McDonnell installed at No 11.
With dwindling options to grow tax revenue in the coming months, Rishi Sunak is reportedly looking at the most valuable properties to aid coronavirus recovery.
As the Government lays the groundwork for its latest business rates review, the idea of an online shopping tax is circulating as a possibility.
The Treasury has published the Call for Evidence for the fundamental review of business rates.