High Street businesses bracing for brutal double whammy of higher property taxes and wages

High Street businesses are bracing for a brutal double whammy of higher property taxes and wages next month.

Business rates will go up by 6.7 per cent on April 1 – costing firms in England an extra £1.7billion alone.

The minimum wage will rise to £11.44 an hour from £10.42 for those aged 23 and over and from £10.18 for 21 and 22-year-olds.

It is the biggest rise in the minimum wage – or National Living Wage as it is known – on record.

The Conservatives have pledged to review the business rates system in three manifestos since 2015 but the industry says little has been done.

‘It is fundamentally a broken system. It’s been needing reform for quite a number of years and really is a priority as we go into the next election,’ said UK Hospitality boss Kate Nicholls.

She and other business bosses want an overhaul to level the playing field between bricks-and-mortar firms and online ones.

High Street firms are paying a premium in comparison to online giants such as Amazon, Nicholls said.

Bosses are furious they will have to pay increases based on September’s out-of-date inflation figure of 6.7 per cent.

From April, companies will pay 54.6p for every pound of their property’s rateable value after four years of paying 51.2p.

The tax was ‘fuelling the death of High Streets up and down the country,’ according to Revolution Bars chief executive Rob Pitcher. ‘We have a punitive tax on business being put up by three times the forecast rate of inflation. It’s utter madness.’

Helen Dickinson, chief executive of the British Retail Consortium, warned the jump ‘does not exist in a vacuum’ as shops battle one of the largest increases to National Living Wage on record.

She said: ‘Government has had five years to fix the problems with business rates, as they promised in their election manifesto.

‘This is disproportionate, destructive, and any Government that is serious about growing the economy must address this as a matter of urgency.’

Restaurant chain Wahaca has no choice but to continue increasing prices for customers, due to the double hit of a rate increase and a £1m hike to its payroll. Boss Mark Selby said: ‘Hospitality right now feels like being in a boxing ring – you just keep getting punched. You get up again but keep fighting.’

His words echo those of Marks & Spencer chief Stuart Machin, who this week claimed doing business in Britain is ‘like running up a downwards escalator with a rucksack on your back’.

Cake Box chief executive, Sukh Chamdal, said his company’s shops were ‘hindered by a regime that doesn’t work for small enterprises, which in turn suppresses the dynamism of high streets throughout the country’.