The Government today announced September’s CPI as 6.7%.
This inflationary figure is used to set the UBR (Uniform Business Rate)/ rate poundage for the next business rates for 2024/25.
Unless the Government intervenes to freeze the business rates multiplier, which is usually announced in January, then businesses are estimated to be contributing a further £1.7 billion to the Treasury in the next financial year.
Estimates currently put the business rates annual contribution for 2023/24 at £26 billion. Experts predict this will rise to circa £27.7 billion as from next April. This could be on the back of business rates rises already felt this year by many firms, due to the 2023 Revaluation coming into effect.
Many business lobby groups, particularly across the retail and the hospitality sector, have been calling for months for the Chancellor to freeze the business multiplier to its current 51.2p for every £1 of a commercial property’s Rateable Value (RV) and 49.9p for small businesses. This was in response to double digit inflationary rates that were seen earlier in the year and sparked fears over unsustainable business rates rises in 2024/25.
As yet, the Government has not addressed these concerns directly, only referring to previous business rates relief packages that have been made available to SMEs and hard-hit sectors.
The retail sector is estimated to pay around 21% of the total business rates tax bill, as it stands, with the logistics and manufacturing sector contributing a further 26%.