Businesses on the high street are preparing for a brutal double whammy of higher property taxes and wages
- UK business rates will rise by 6.7% on April 1, 2024
Businesses on the high street are preparing for a brutal double whammy of higher property taxes and wages next month.
Business rates will rise by 6.7 percent on April 1 – costing businesses in England alone an extra £1.7 billion.
The minimum wage will rise to £11.44 per hour, from £10.42 for people aged 23 and over and from £10.18 for 21 and 22 year olds.
Battle: Business rates ‘fueling the death of high streets across the country’
It is the largest increase in the minimum wage – or the National Living Wage as it is known – ever recorded.
The Conservatives have promised to overhaul the business rates system in three manifestos since 2015, but the industry says little has been done.
‘It’s fundamentally a broken system. It has been in need of reform for a number of years and is a real priority at the next election,” said Kate Nicholls, boss of UK Hospitality.
She and other business bosses want an overhaul to level the playing field between brick-and-mortar and online businesses.
High street companies pay a premium compared to online giants such as Amazon, says Nicholls.
M&S CEO Stuart Machin spoke out this week
Bosses are furious at having to pay increases based on the outdated inflation rate of 6.7 percent in September.
From April, businesses will pay 54.6p for every pound of the rateable value of their property, after paying 51.2p for four years.
The tax “fueled the death of high streets across the country,” said Rob Pitcher, CEO of Revolution Bars. ‘We have a punitive tax on companies that is three times higher than expected inflation. It’s total madness.’
Helen Dickinson, chief executive of the British Retail Consortium, warned that the jump ‘is not happening in a vacuum’ as stores battle one of the biggest ever increases to the National Living Wage.
She said: “The government has had five years to resolve the business rates problems as they promised in their election manifesto.
“This is disproportionate and destructive, and any government serious about growing the economy must address it urgently.”
Restaurant chain Wahaca has been left with no choice but to continue raising prices for customers, due to the double whammy of a rate increase and a £1m payroll increase.
Boss Mark Selby said: ‘Hospitality at the moment feels like being in a boxing ring – you just keep getting punched. You get back up, but you keep fighting.”
His words echo those of Marks & Spencer chief Stuart Machin, who this week claimed that doing business in Britain is “like walking up an escalator with a backpack on your back”.
Cake Box CEO Sukh Chamdal said his company’s stores were “hampered by a regime that doesn’t work for small businesses, which in turn stifles the dynamism of high streets across the country.”