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High Street businesses are bracing for a brutal double whammy of property taxes and higher wages next month.
Business rates will rise by 6.7 per cent on April 1, costing businesses in England just an extra £1.7bn.
The minimum wage will rise to £11.44 an hour from £10.42 for those aged 23 and over and from £10.18 for those aged 21 and 22.
This is the largest increase on record in the minimum wage (or national living wage, as it is known).
The Conservatives have committed to reviewing the business rates system in three manifestos since 2015, but the industry says little has been done.
Fight: Business rates ‘fueling the death of high streets across the country’
‘It is fundamentally a broken system. “It has been in need of refurbishment for quite a few years and is really a priority ahead of the next election,” said Kate Nicholls, head of UK hospitality.
She and other business bosses want reform to level the playing field between brick-and-mortar and online businesses.
High Street businesses are paying a premium compared to online giants like Amazon, Nicholls said.
Bosses are furious that they will have to pay increases based on the outdated September inflation figure of 6.7 per cent.
From April, businesses will pay 54.6p for every pound of the rateable value of their property after four years of paying 51.2p.
The tax was “fueling the death of high streets across the country”, according to Revolution Bars chief executive Rob Pitcher. ‘We have a punitive tax on companies that represents three times the expected inflation rate. It’s total madness.
Helen Dickinson, chief executive of the British Retail Consortium, warned that the jump “does not exist in a vacuum” as stores battle one of the biggest increases in the national living wage ever recorded.
She said: ‘The government has had five years to fix the problems with business rates, as they promised in their election manifesto.
“This is disproportionate and destructive, and any government serious about growing the economy must urgently address it.”
Restaurant chain Wahaca has no choice but to keep increasing prices for customers, due to the double impact of a rate rise and a £1m increase in its payroll. Boss Mark Selby said: “Hospitality at the moment feels like being in a boxing ring – they keep hitting you.” You get up again but you keep fighting.’
His words echo those of Marks & Spencer boss Stuart Machin, who this week said doing business in Britain is “like running up an escalator with a rucksack on your back”.
Cake Box chief executive Sukh Chamdal said his company’s stores were “hampered by a regime that does not work for small businesses, which in turn suppresses the vibrancy of high streets across the country”.