CPI to be used to calculate business rates from 2020 on

17 July 2017

The Treasury will help companies by indexing the business rates tax against consumer prices, rather than faster-rising retail prices starting in 2020, a spokesman said on Saturday.

Business rates are taxes to help pay for local services, such as police and firefighters, charged on most non-domestic properties, including shops, post offices, warehouses, pubs, cafes and restaurants.

Traditional retailers, including the sub post offices represented by the NFSP, have long argued the tax unfairly benefits online retailers, as they tend not to have many large properties.

"We are committed to switching business rates indexation from RPI (retail price index) to CPI (consumer price index) from 2020 and will introduce legislation in due course," the spokesman told the Reuters news agency.

While consumer price inflation hit a four-year high of 2.9% in May, the old retail price inflation gauge rose to 3.7% from 3.5%. Observers estimate that the move to CPI could save shops about £1bn in business rates in the three years from 2020.