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Budget 2017: switch from RPI to CPI brought forward two years

Budget 2017: switch from RPI to CPI brought forward two years

In today's Budget announcement, chancellor Philip Hammond announced that the switch over for business rates from retail price index (RPI) to the consumer price index (CPI) will take place two years earlier than planned.

The switch to CPI as a measure of inflation in April 2018, the chancellor claims, will save businesses £2.3 billion over the next five years. 

This change is estimated to save businesses nearly 1% on their rates bills.

Hammond said: 'Today I will accept the representation of the British Chambers of Commerce, CBI and other business organisations and bring forward the planned switch from RPI to CPI by two years, to April 2018.’

Welcoming the change to business rates Keith Cooney, head of business rates at Knight Frank, commented: 'If this is a new dawn with the government listening to the experts once more, then hopefully they will now look at the new rating appeals system which is not working and is causing an equal unnecessary mess.'

However, Toby Ryland, corporate tax partner at HW Fisher & Company, warned that this is 'a classic sucker punch'. 

He said: 'Initially businesses will see rates rise more slowly, but before long they’ll be paying more as revaluations will happen every three years rather than every five.'

 

 

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