UK retailers could see colossal rise in business rates

London - The ongoing fight for reducing business rates for the UK's retailers could soon be considered a lost cause.

With new calculations set up by the current government, the UK's high street retailers could potentially see their business rates increase 17.2 percent by next April.

The Retail Price Index rise for September is used by the government to calculate the annual level of business rates. The index rose 0.8 percent year-on-year last month, despite the Consumer Price Index showing that the UK entered deflation. Rates bills will rise by the same amount, despite calls from retailers for a rates freeze.

A 5000 pounds relief scheme will end in 2016

Although the rise seems small on last year, a 5,000 pound retail relief scheme will end in March, so the true rise will be 17.2 percent.

Jerry Schurder, head of business rates at Gerald Eve, called on the Government to clarify whether it plans to extend the relief to reassure struggling high-street retailers, The Independent reported.

He said: "The Government's piecemeal, sticking-plaster approach to business rates is clearly flawed and makes the system more complicated than it need be. Rather than being able to accurately predict their bills for next year, retailers are left on tenterhooks waiting to see if some crumbs will be thrown down from the Chancellor's table in his Autumn Statement."

Retail Week reported that BRC chief executive Helen Dickinson said that such a rise would be unfair on those with a bricks-and-mortar presence because the growth in retail sales is being driven by online, where online retailers are not required to pay business rates.

Dickinson said: “We have to recognise there is a deficit that has to come down, but the way to square the circle is to make changes across the whole of business taxation and not just business rates.”

Image:Business rates