Retailers are heading for a business rates reprieve after five years of crippling increases, according to analysts at consultancy Capital Economics.
The consultancy predicts that September’s Retail Prices Index, the measure of inflation to which the annual business rates rises are pegged, will increase by 0.7%, compared with 2.3% in September last year.
This would create a business rates increase of £200m across all business sectors and around £50m for the retail sector, according to the Daily Mail.
Business rates have risen by 20% since 2011, taking the total expected this year to £28bn.
But business rates campaigner Paul Turner-Mitchell said business rates for small shops could rocket next year as retail relief comes to an end.
He said that despite low inflation, the average shop on a high street could see their business rate bill for this year increase from £7,589 to £9,153 next year if the rate relief is not renewed.
Turner-Mitchell said: “Low levels of interest will count for nothing if the chancellor does not commit to retaining the retail discounts next year until the revaluation in 2017. The reality is that, without the discounts, bills will rocket for small shops by 20% on average with large shops seeing increases of just 0.7%, the lowest increase since 2010.”
He added the £50m increase for the retail sector could quite easily be £338m without a firm and early commitment to the retention of retail discounts from the chancellor George Osborne.