This week’s zero per cent Retail Prices Index (RPI) inflation figure highlights the misguided nature of the five per cent rise in business rates to be paid by companies to local authorities, the Confederation of British Industry (CBI) has warned.
The rise, due to come into effect in April, is based on the RPI figure for last September, which was five per cent. It does not take into account the fall in the RPI to zero per cent.
The CBI has been calling for a two-year freeze in business rates to protect companies fighting for survival from being unintentionally crushed by the tax hike. The rise in business rates threatens jobs and economic growth.
Dr Neil Bentley, director of business environment, said: ‘The inflation figures show that the planned rise in business rates has been caused by the unfortunate timing of inflation figures.
‘A spike in inflation half a year ago should not be allowed to poke business in the eye now, at the worst possible time, just because business rate rises are normally set in the month of September.
‘The government should freeze business rates for two years, helping companies to survive the recession and saving jobs,’ he added.