Business rates are set for their biggest rise since the modern system began in 1993 – despite companies facing the toughest economic conditions in decades.
Industry groups and the Conservatives have urged the government to take urgent action to prevent the 5 per cent jump in April which, they say, is inappropriate at a time when other prices are set to fall.
About £20bn a year is collected by councils through the business rate, suggesting that an extra £1bn could be levied with this year’s rise.
However, while it is local authorities that gather the tax, the rate for this year was set by central government according to retail price index inflation last September – when the figure was running at its highest for 18 years because of rising commodity prices. Experts believe the RPI will turn negative this year as the economy sinks further into recession.