The government has come under renewed pressure to scrap next month’s £1bn hike in the uniform business rate after figures today showed that inflation fell to zero last month.
Gerald Eve head of rating Jerry Schurder said government should abandon its planned 5% rise in April, after it emerged today that the retail price index for February had fallen to one of its lowest levels on record.
Business rate rises are calculated using the previous September’s RPI, but Schurder said that “exceptional economic circumstances” meant this link should now be broken.
He said: “With one simple step the government could achieve much more to aid industry and preserve our high street than it achieved with its VAT reduction, yet it appears perversely intransigent.”
“Normally, there is not a significant difference between the RPI figure in September and the following March/April when the bills go out but the exceptional current economic circumstances have led to a huge gap between the two.
“The RPI in September 08 was artificially high and it has now fallen to one of the lowest levels on record. This will result in real increases in rates bills of 5% this April, increasing business costs by £1bn at a time when occupiers can least afford it.
“UK Plc already faces just about the highest property tax in the world which makes the government’s reluctance to help at this time of need particularly galling.”
Chancellor Alistair Darling has so far said there are no plans to amend the system this year, despite lobbying from retailers and the CBI.
