SEPTEMBER 2021'S CPI RATE SIGNALS £1 BILLION BUSINESS RATES INCREASES FOR ENGLAND IN APRIL 2022
The 2021/22 Rates year starts on 1 April 2022 and rates bills for this year will be issued shortly beforehand, generally during March in England and Wales. The Government is expected to announce that the setting of the Uniform Business Rate multiplier in England will be based on Consumer Price Index (CPI) inflation.
The Ministry of Housing Communities and Local Government is expected to reveal that the 2021/22 small business Uniform Business Rate multiplier in England will be 65.9 pence (up from 49.9 pence). This will apply to hereditaments with a rateable value of less than £51,000. The multiplier for larger businesses, those occupying properties with a rateable value of £51,000 or more, will be 67.6 pence (up from 51.2 pence).
For those properties in London paying the Crossrail Business Rates Supplement, this will remain at 2.0 pence, the maximum allowed figure.
These increases are based on the increase of 3.2% in the CPI, the index upon which the Non-Domestic Rates Multiplier in England is set.
Analysis of our portfolio suggests that these increases will result in an average increase in rates payable of around £7,000 per annum for Ratepayers in England.
These increases in the CPI mean that businesses are facing a punitive £1 billion rise in business rates next year as a result of soaring inflation caused by distortions during the pandemic.
These increases would mean that the increase would secure an incredible £30.1 billion in revenue from Business Rates in the 2021/22 tax year.
In Wales, the Welsh Assembly Government Budget for 2021/22 is not yet finalised, but it is anticipated that the Uniform Business Rate multiplier for 2020/21 also increase. The multiplier in Wales is based on the Retail Price Index (RPI), which is typically 1% greater than the CPI. Based on initial investigations this increase indicates the multiplier in Wales would increase to 70.6 pence.
Following the Chancellor’s winter plan, which cleanly missed the opportunity to deliver practical, targeted support to help with business rates bills the Government now has an opportunity to disprove it’s critics, showing that the business rates system is in step with reality, ensuring appeals to reduce property values because of Covid are accepted quickly, and at the same time, injecting additional targeted financial support to where it is needed most.
In the meantime, if you have concerns about potential increases to your rateable value, do not hestiate to contact us on 0203 949 554 and speak with one of our specialist advisors.