In today's Budget, Chancellor Phillip Hammond announced that he would be bringing forward the planned business rates switch from RPI to CPI by 2 years, meaning the move would take place in April 2018.
Annual increases in business rates in the UK are currently linked to the Retail Prices Index (RPI) and in the last 12 months, the Government has introduced a package of business rate relief which it said was worth almost over £9 billion, including the planned move to calculating business rates using the Consumer Prices Index.
Hammond today announced that, following representation from the British Chambers of Commerce, CBI and other business organisations, the Government would bring forward the planned switch from RPI to CPI by two years, to April 2018 - a move which he said would be worth £2.3bn to businesses over the next five years.
"We can’t build an economy fit for the future without supporting its backbone. Our 5.5 million small businesses who are responsible for nearly half of our private sector jobs. They give it extraordinary vibrancy and resilience. But I recognise that many are feeling under pressure right now. And I know what hard work it is to get a business off the ground; to get it to grow. So today I want to do what we can to ease that pressure."
Gerry Biddle, director of Business Rates at Deloitte Real Estate, comments on the Autumn Budget:
“The Chancellor announced that the annual inflationary uplift which is currently linked to RPI (retail price index) would be linked to CPI (consumer price index) from 2018 thus saving ratepayers 0.9%, this will cost the Exchequer next year approximately £253 million. This announcement brings forward this move from 2020 and it will be welcomed by hard pressed business occupiers.”