Jeremy Hunt has been urged to freeze business rates again, amid warnings that a multi-billion hike in bills could dent investment and leave many small firms “on the brink”.

Last autumn the chancellor announced a major support package worth £13.6 billion to help businesses still recovering from the pandemic. It included freezing business rates, which usually increase annually, as well as increasing the discount for retail hospitality and leisure businesses from 50 per cent to 75 per cent for 12 months, capped at £110,000 per firm.

However, business rates are now set to increase again next April under the government’s “multiplier”, which is pegged to inflation in September, as measured by the consumer price index.

While inflation fell in July from 7.9 per cent to 6.8 per cent, the Treasury is braced for it to rebound again in August, meaning firms could face a steep increase in their rates. Coupled with the ending of 75 per cent rate relief, it will add further financial strain for many firms.

An analysis by UKHospitality, shared with The Sunday Times, suggests that increasing business rates by inflation could increase bills for the hospitality sector by £220 million next year. This would come on top of an additional £630 million cost from rates relief ending, leaving restaurants, pubs and cafés facing an additional bill of £850 million in the new financial year.

The Sunday Times. To read the full story click here