Businesses in England are to face an “unavoidable double hit” to their property tax payments next year, which will see total payments surge by about £2.5bn, according to new figures.
Analysis from global tax firm Ryan indicated that inflation and a government tax change will combine to drive up business rates bills further.
Business rates are the property taxes paid on commercial properties across the UK and particularly affects high street businesses. They are devolved in Scotland, Wales and Northern Ireland.
From April next year, a nationwide revaluation process will take place on business rates in England, linking payments to values in the property market from April 2024.
Revaluations of the tax are revenue neutral across the country, meaning that the overall tax take should not change, but that the size of bills will be distributed based on changing valuations in certain sectors and regions.
However, despite this revaluation, business rates yields will still rise in line with inflation from April.
The increase in business rates is typically based on the consumer price index (CPI) inflation measure for September.
Therefore, this year’s September reading will dictate how large an increase firms have next year.