BRC calls for switch to CPI for business rates
The British Retail Consortium says retailers are under pressure from the system used to calculate business rates, and has asked Eric Pickles, secretary of state for communities and local government, to use a different method in future. The government recently decided to switch from the retail prices index (RPI) to the consumer prices index (CPI) for calculations regarding benefits and public-sector pensions, as it is considered a better reflection of everyday prices – but RPI is still used to calculate business rates.
This September’s RPI rate, which the BRC notes is expected to be above 4%, will be used to set next April’s business rates. The BRC says the large increase, plus the additional costs related to the transitional scheme phasing in the recalculation of rateable values in April this year, could see some retail businesses paying almost 22% more in April 2011. It says this will undermine the ability of retailers to maintain and create jobs, at a time when the public sector is facing substantial cuts.
Stephen Robertson, the BRC’s director general, said: “We’re urging the government to use alternatives to September’s RPI to calculate next April’s bills. The coalition has already changed the way pensions are calculated. It’s now using CPI rather than RPI – this change could also apply to business rates. Another option is to use the 12-month average RPI rate from October 2009 to September 2010 – which would help to iron out inflation volatility.”
The BRC is also calling for the re-introduction of Empty Property Rate Relief, since it was removed in April 2008. It says the recent temporary increases in EPRR, allowing more empty properties to qualify for an exemption until April 2011, were a welcome step in the right direction, but Roberston adds: “Given the threat of a double-dip recession, the government must seriously think about allowing more businesses to benefit from the relief and extend the timeframe to 2012.”
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