September inflation figure announced with implications for 2024/25 business rates

The CPI for September 2024 has been announced at 1.7% which has a direct impact on the 2025/26 Uniform Business Rate (UBR) that’s used to calculate business rates for the forthcoming financial year.

The inflation drop to 1.7% – the lowest it has been since 2021 – will give some relief to businesses after seeing double digit inflation recorded over the last couple of years.

This latest CPI figure is estimated to take the total tax raised by business rates, from circa £29.4 billion in 2024/5 to £29.9 billion for 2025/6, as from next April. Unless the Government steps in and freezes the business rates’ multiplier, all sectors and business sizes will be affected.

In last year’s Autumn Statement, the Chancellor Jeremy Hunt froze the small multiplier for 2024/25 at 49.9p but the standard multiplier increased with inflation to 54.6p. Whilst industry lobbyists have called for another freeze, with a £20+bn financial “black hole” to plug, few are forecasting a similar or more generous gesture from Labour’s Rachel Reeves.

Experts predict that the three main sectors that make up the lion’s share of business rates payments – logistics, offices and retail – will pay an additional £355 million, combined.

SECTOR % of overall business rates bill           Estimated additional       amount to pay in 2025/26
Logistics/manufacturing 27%      £135 million
Offices 23%      £115 million
Retail 21%      £105 million