"Businesses across England and Wales are set to see their business rates bills rise next year, following publication of new official figures, experts have warned.
Ratepayers will pay up to 0.8% more in business rates, in line with the latest statistics on inflation.
Business rates bills are linked to the Retail Price Index (RPI) measure of inflation, published every September by the Office for National Statistics. The new bills come into force the following March. The latest indicators show that RPI fell from 2.3% in September 2014 to 0.8% in September 2015, meaning businesses will experience a smaller rise in business rates in 2016.
However, the official measure of inflation used for setting interest rates and pensions – the Consumer Price Index (CPI) – showed that inflation is currently 0.0%. Industry experts believe that it is not fair that business rates are not linked to this more reliable measure of inflation – one which would see no increase in business rates next year.
Mark Rigby, CEO at CVS, said: “One of the frustrations with the business rates system is that bills seem to bear little relation to what’s happening in the ‘real world’. Even the smallest increases can mean hundreds or even thousands of pounds more in rates each year. Government reliefs for small businesses have become annual PR exercises at the dispatch box and businesses ultimately need better long-term visibility of their overheads.
“The Business Rates system needs to be fairer and more transparent. The link to RPI is another sign that the current rates regime is clunky, archaic and not geared towards serving businesses. Switching the link from RPI to CPI is a simple measure which would less volatility and more clarity for businesses across the country."
-Paul Norman, Tuesday 20 October 2015
