IoD chief calls on the Chancellor to reform business rates system

Tej Parikh, chief economist at the Institute of Directors, is calling on the Chancellor to use the Autumn Budget “to slash firms’ property tax bills and begin reforming the broken business rates system.” The move is in response to the latest official inflation figures, showing that the Consumer Price Index (CPI) remained at 1.7% in September. “With growth in pay packets continuing to outstrip inflation, households will have some support for spending in the months ahead,” he said. “Although inflation remains below target now, it is likely to pick up above 2% soon, particularly in the event of a Brexit deal which will help release some pent-up demand. “The inflation data is unlikely to significantly change the Bank of England’s calculations on interest rates, which remain firmly dependent on various Brexit scenarios. However, with current price growth still under target, MPC members may have extra confidence to lower the Bank rate in the event of a no deal. “For firms, September’s inflation figures are particularly important given the role they play in determining business rates increases for the year ahead. The business community is already facing a slew of rising cost pressures, so further inflation-indexed increases to their expenses are likely to bite harder, despite the relatively low rise. The Chancellor has a key opportunity in the Autumn Budget to slash firms’ property tax bills and begin reforming the broken business rates system.”