Retailers are facing a £242 million annual increase in business rates after official figures showed that the retail price index (RPI) measure of inflation grew by 3.2 per cent in the year to September.
RPI fell slightly from 3.3 per cent in August but grew by 3.2 per cent when compared on a like-for-like basis with September 2012, data from the Office for National Statistics has shown.
According to Helen Dickinson, director general at the British Retail Consortium (BRC), this figure will be used to calculate the increase in business rates for 2014.
The increase means that retailers will pay £3.44 in business rates for every £1 they pay in corporation tax in 2014 – up from £2.48 per £1 in 2005. Dickinson said:
“At the BRC we have spoken to retailers who will be forced to close shops because of the increase and many that have decided not to open new ones. This tax increase is likely to cost communities across the country 19,670 full time jobs. It is clear that the business rates system is no longer fit-for-purpose. It requires complete reform.”