Companies in England are fearful of seeing their costs rising sharply next year as business rates are adjusted upwards in line with inflation.
There are concerns too that some firms will be impacted both by inflation-related cost increases and by having their rates revised upwards following the revaluation of business rates, which is scheduled to happen next year for the first time since 2017.
Even operators that see their business rate liabilities revised downwards will have the resulting benefits eroded if inflation remains high heading into 2023, as most economic experts currently anticipate will be the case.
Meanwhile, those companies whose business rates costs go up after the revaluation process will find their overheads having jumped still more significantly.
The Financial Times has reported that several industry groups have been making the case to government ministers that the potential impacts of these dynamics on businesses could be huge and ought to be offset at least to some extent.
Louise Hellem, director of economic policy at the Confederation of British Industry (CBI), is quoted as saying: “Unless urgent steps are taken to ease the business rates burden, firms are facing a hike in their bills in April of around 10 per cent just from inflation.
“This is an iceberg threatening businesses already reeling from soaring energy costs post-pandemic.”
Craig Beumont from the Federation of Small Businesses is understood to have urged chancellor Nadim Zahawi in person recently to address the potential for small firms to be badly impacted by steep rises to their business rates.
“This coming year small businesses will face a business rates double whammy of inflation and a revaluation, with some companies potentially facing huge hikes of 200 per cent,” he’s quoted as saying.
The CBI and other industry organisations have long advocated for a radical overhaul of the business rates regime in England but a review conducted last year effectively ruled out any major changes to the system in the near future.
Business rates are applied differently in England as compared to the rest of the UK, with responsibilities for the relevant regimes devolved to the respective parliaments of Scotland and Wales.