LONDON (Reuters) - Britain will reduce the annual rise in business rates by bringing forward a planned change in the way the tax is calculated, chancellor Philip Hammond said on Wednesday.
Business rates are taxes to help pay for local services, such as police and firefighters, charged on most commercial properties, including shops, warehouses, pubs, cafes and restaurants.
They are currently calculated according to the rental value of properties and have an annual inflationary uplift.
Hammond said he would accept the representations of the big business organisations and bring forward by two years to April 2018 the planned switch from using RPI (Retail Price Index) to CPI (Consumer Price Index), which is lower, to calculate the tax.
Hammond said the move was worth 2.3 billion pounds to Britain’s businesses over the next five years.
Gerry Biddle, director of business rates at Deloitte Real Estate, said the change would cost the government about 253 million pounds next year.
“This announcement brings forward this move from 2020 and it will be welcomed by hard pressed business occupiers,” he said.
Reporting by James Davey; editing by Stephen Addison and Kate Holton