The Governments plan to increase the business rates by 5 per cent has meet fierce resistance from UK retailers with many fearing that they may be tipped into insolvency that will exacerbate the current downturn.
The rate rise is based on the retail price index of inflation from last September; however this has dropped considerably in the past 6 months and is expected to head into negative figures later this year.
Retailers including Topshop, BHS, Tesco, Marks and Spencer, Asda, Debenhams, New Look and B&Q have banded together to demand that the rise is scrapped or at least postponed.
The Chancellor has made it quite adamant that the 2009 – 2010 business rates will stay as originally intended as freezing them would cost in the region of £1 billion.
The rise comes just as retailers are suffering from reduced sales as the recession keeps rolling on. It is feared if nothing is done then other retailers will follow the likes of Woolworths, Zavvi and MFI into oblivion.
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