Experts have warned British businesses could face an extra £1bn tax bill next year.
Figures from the Office for National Statistics showed that Retail Price Inflation (RPI) was 3.9pc in September. This figure will be used to set new business rates values in April, on top of changes to the system that came in earlier this year.
Without intervention to freeze business rates, retailers and other firms would face a rates rise twice as large as last year.
The total increase in business rates across all sectors could be as much as £1bn in April if the 3.9pc increase goes ahead, based on the £25.7bn paid in rates in the current financial year.
The rise could add another £273m to retailers’ bills alone.
The consequences of the RPI figures could be severe for many shops in an uncertain position and fighting to survive. Consumers will face further distress as the pound in their pocket buys them less at the checkout.
For many shops, the rise could be “the last straw.
The cost of failing to take action will likely result in yet more empty shops and gap-toothed high streets.
Many businesses had already been affected by a revaluation of properties that came into force in April.
Companies, especially those in central London, have been hit by huge increases in their rates bill because the properties they rent are now worth far more than when the system was last assessed in 2010.
The Government should move to link the rates to the lower Consumer Price Index immediately, rather than in 2020 as is currently planned.
The Treasury has claimed the change to CPI indexing would save companies £1bn in the first three years, including a £250m saving for the retail sector.