Companies face an £819m business rate increase unless inflation falls

Published on: September 19, 2018

Companies face an £819m business rate increase unless inflation falls from six-month high of 2.7% this month

Interest rate rise next April to add £819million to the sky high bills of British firms
Retail industry which has seen jobs vanish to pay another £210million in rates
Tax rate on large premises to climb above 50p in the pound under new rules

By City Correspondent For The Daily Mail

Published: 21:28 BST, 19 September 2018 | Updated: 21:33 BST, 19 September 2018

Companies face an £819million increase to their business rates unless inflation falls this month.

Rates rise every year in line with September’s inflation figure, which will be published next month.

Figures yesterday showed prices rose by 2.7 per cent in August.

Governor of the Bank of England Mark Carney speaks at an inflation report press conference in London last month. The report showed that price rises will hit 2.2 per cent next year and 2.1 per cent in 2020

If that figure is unchanged this month, it will add £819 million to English firms’ tax bills, according to consultancy Altus Group.

The ailing retail industry alone would be forced to cough up £210million more than it already pays.

The rate increase will come into effect at the start of the new financial year in April.

The owners of a £200,000 building would then owe taxes of £101,200, under new laws due to come in to effect next April (File photo)

The owners of a £200,000 building would then owe taxes of £101,200, under new laws due to come in to effect next April (File photo)

A 2.7 per cent rise would see the standard rate of tax on large premises climb above 50p in the pound for the first time since rates were introduced in 1990.

At present, the annual charge is 49.3p of rates for every pound of a property’s estimated rental value – so for a building valued at £200,000, the rates payment would be £98,600.

But if the 49.3p figure rises by 2.7 per cent, it would increase to 50.6p.

The owners of a £200,000 building would then owe taxes of £101,200.

The Daily Mail is campaigning to save Britain’s High Streets amid fears that sky-high business rates and brutal competition from foreign internet rivals such as Amazon are wrecking our traditional shops.