ONS Inflation Figures Signal Rates Set To Rise By £1.1 BILLION Next Year for businesses Without Government InterventionTuesday, October 17, 2017
Business rates bills from 1st April next year will rise by a staggering £1.1 billion for businesses across England and Wales without Government intervention as the ONS today reported The Retail Prices Index (RPI) at 3.9%.
RPI affects business rates bills with the Uniform Business Rate (UBR) multiplier increased annually in line with September’s RPI inflation.
The Retail Prices Index has rapidly increased from 2% last September to over 3% since February, increasing from 3.6% in July to 3.9% in August, its highest level since January 2012.
Within the 2016 Budget, the Government announced the uprating for inflationary increases of business rates would be switched from the higher RPI calculation to the lower CPI (Consumer Prices Index) measure.
The Treasury has reiterated that commitment, following the General Election, saying "We are committed to switching business rates indexation from RPI to CPI from 2020 and will introduce legislation in due course."
Businesses across England and Wales will face a £1,148,820,140 rate rise next April based on their collective 2017 Rateable Values.
Greg Clarke, Secretary of State for Business, has said that a fundamental business rates review is at an "advanced stage" and "may even be part of the Autumn Budget."
Here at CVS, we are urging the Chancellor to be “bold” within next month’s Autumn Budget, calling for a freeze in the inflationary increase.
Property taxes in Britain are already the highest of any European nation both as a percentage of GDP and overall taxation. Brexit is driving inflation and businesses are holding off from investing because of the current economic climate of uncertainty. Insolvencies are expected to rise over the next two years.
It is our opinion that to plough ahead with such rate rises would be foolhardy and the Chancellor must be bold in his vision with a freeze.