Business rates top Budget agenda for business groups

Two leading business groups have called on the Chancellor to scrap the 2.6 per cent rise in business rates planned for April.

In their submissions to the Chancellor ahead of the 20 March Budget, the Forum of Private Business (FPB) and the British Retail Consortium (BRC) both called on the Government to reduce the cost of doing business and said that scrapping the planned April business rates rise was a necessary starting point.

The FPB found that 94 per cent of the businesses it spoke to believed that rates had 'spiralled too high'. Business rates increased by 5.6 per cent in the 2012/13 tax year and 4.6 per cent the year before.

Alex Jackman, head of policy at the FPB, said: " Business rates are one of the major costs faced by British businesses and although the certainty created by linking business rate increases to RPI level from the preceding September is welcome, in current conditions inflation remains high and has had a disproportionate effect on increases."

"By scrapping business rate rises this April and capping them at two per cent over the following two years, the government can help with both cash flow and certainty for financial planning."

The BRC's director-general, Helen Dickinson, said that changing the way business rate rises are calculated would help achieve 'increases that are more affordable and predictable' for retailers, suggesting that an annual average of the consumer prices index should be used instead of the monthly retail prices index figure.

Dickinson said: "Retail is a major force for good. It's the UK's largest private sector jobs provider and has been a powerhouse for investment and growth, even during the relentlessly tough times of the last few years."

"There were welcome measures in the Autumn Statement and the Chancellor has it within his gift to do a great deal more. Our figures show dramatic increases in operating costs, often as a direct result of Government decisions."