Nightmare of business rates eased as Hammond announces raft of changes to system

 
Helen Cahill
Follow Helen
UK Prepares For Possible Interest Rate Increase
Source: Getty

The nightmare of businesses rates was eased today as the chancellor announced a raft of measures designed to help firms with the property tax.

The government will switch the indexation for the rise in business rates due next April from RPI to CPI, a measure the lobby groups have campaigned for and is designed to save businesses £2.3bn over the next five years.

The British Retail Consortium (BRC), which led the campaign for the change, said the decision was "hugely welcome and positive".

"From being caught in a web of competing pressures from all parts of the economy, limiting the scope for action, 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 the rising rates bill," said Helen Dickinson, chief executive fo the BRC.

Read more: London firms lifted as Hammond lets the capital keep its business rates

Hammond also said he would extend the £1,000 discount handed as a relief to pubs with a rateable value of up to £100,000.

In addition, revaluations of business rates will now happen every three years to ensure changes to rates will not be so dramatic as they were this year.

Alex Probyn of Britain's largest ratings advisory, Altus Group, said: “Even with rates rises limited next year to September’s CPI rate of three per cent, this still drives revenue receipts up by £284m across the 32 London boroughs and the City through inflation alone.

“A switch to CPI brings a concession in tax rises of about £85 million for London, but this is a pretty cheap giveaway by Government. The Chancellor should have gone further."