Ratepayers might be forgiven for believing that the tax scales are badly damaged or at worst badly weighted against them. As the UK economy stalls and the International Monetary Fund forecasts lower growth in the year ahead (down from 1.9% to 1.7% this year and 1.5% in 2018), businesses are being urged to brace themselves for inflation busting annual rate increases in 2018-19.
With the Consumer Prices Index (CPI) likely to top 2.5% in September the critical measure for next years’ annual rates increase will be the Retail Prices Index (RPI) and this measure is more likely to be in excess of 3.5% at 30 September, when the announcement is made on 17th October. The August figure was 3.9%.
The RPI increase will be on top of any addition applied through the punitive transitional regime that will apply increases of up to 32% where rateable values rose significantly at this years’ general rating revaluation. Transitional decreases could be almost wiped away by inflation. Bad news for struggling northern ratepayers.
Montagu Evans are now calling for the Chancellor to act in the interests of a sustained high street growth and a full economic recovery. Our three point plan is to allow simple ratepayer access to a more effective appeals review, an ‘inflation free’ pledge for ratepayers affected by maximum transitional increases and a full downwards benefit for small businesses without transition in 2018-19.
No news is bad news for ratepayers, hard pressed and desperate for some positive tax relief as the economy slows.