Altus Group said next month could be “pivotal for the hospitality sector” as the upcoming Consumer Prices Index (CPI) measure of inflation determines how business rate rises with the Uniform Business Rate (UBR – pence in the pound), which is uprated annually for inflation.
A 2.5% uprating for inflation would add an additional £758.5m to the overall gross business rates figure. Business rates income has risen by £6.04bn, up by a third during the last 10 years, to a projected £24.8bn in England this year.
The September CPI figure is the one that is used for the purpose of annual rate rises for the following financial year. The real estate company predicts that the business rates bills next year for 2019/20 would increase overall by £758.5m in England.
It said hotels would face a £19.8m increase with pubs shouldering £18.71m of the increase and restaurants £12.75m.
Chancellor Philip Hammond sought to appease concerns over last year’s business rates revaluation, announcing a £2.3bn reprieve in his Autumn 2017 Budget by bringing forward plans to switch from the discredited Retail Prices Index (RPI) measure, two years earlier, from April this year.
Robert Hayton, head of UK business rates at Altus Group, said: “With our high streets engulfed in crisis and brexit uncertainty hurting manufacturers and the services industries, the Chancellor should be bold within his Autumn Budget later in the year through an unprecedented stimulus by freezing rate rises.”