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Businesses across the UK have welcomed the Chancellor’s decision to bring forward plans changing the way business rates are set by two years.
In the Autumn Budget, Philip Hammond announced that from April 2018 business rates would rise in line with the Consumer Price Index (CPI) measure of inflation, not the Retail Price Index (RPI).
This move will help around 5.5 million small businesses to save up to £2.3 billion over the next five years, according to the Chancellor.
Business rates were due to go up next year in line with September’s RPI of 3.9 per cent, but will instead stay in line with CPI that was three per cent during the same month.
Helen Dickinson, Chief Executive of the British Retail Consortium, which campaigned for the switch alongside the British Chamber of Commerce, said: “It’s clear that the Chancellor has listened to the retail industry and the growing chorus from across business and commercial life who have spoken up in favour of action to mitigate rising rates bills.
“Crucially, this relief will unleash investment that retailers want to direct towards the needs of their customers.”
Within the Budget, Mr Hammond also promised a change to the law that has led to companies receiving much higher rates bills if their offices were in communal blocks or spread over several floors.
This move comes after the Supreme Court ruled that a single business space meant that small businesses using multiple spaces in a building had been billed for rates as if they were separate premises, but should not have been.
The Chancellor has also promised to backdate the law to compensate firms for the additional charges.
In April this year, many businesses saw a rise in their business rates, some experiencing more significant increases than others. This rise reflected the first adjustment of rateable property values for seven years.
Those hardest hit were retailers and offices in city centres where property prices have risen the most.
To prevent a similar drastic rise in future, the Government has now committed itself to revaluations on a three year basis, instead of a five year basis as previously proposed.