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Business rate: it's 2%

Chancellor Alistair Darling has gone back on plans to increase the uniform business rate by five per cent in April.

Businesses will now face a two per cent rise this year and the remaining three per cent will be "smoothed out" over the following two years.

The rise was linked to the Retail Prices Index (RPI) last year, but RPI inflation has now fallen to zero and is expected to fall further.

The Chancellor estimated that one-and-a-half million properties would gain from the change and £600 million would be deferred.

The rates rethink is welcomed by small businesses who feared they might not be able to afford the five per cent rise but many are calling for more action from Government with the introduction of an automatic small business rate relief for eligible firms.

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Alistair Darling

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