CBI: Inflation shows business tax rise is misguided
Mar 25 2009
Inflation figures released yesterday suggest the plans to increase business rates to five per cent are 'misguided', according to one industry body.
Data collected for the retail price index (RPI) shows inflation stood at zero per cent in February, a drop from 0.1 per cent in January, which the Confederation of British Industry (CBI) says gives good reason to scrap planned tax increases.
The proposed rise in the fee, which is paid by businesses to local councils, was based on the RPI in September, when it stood at five per cent, and does not take into account the recent drop.
Dr Neil Bentley, director of business environment at the CBI, says: 'Today's inflation figures show that the planned rise in business rates has been caused by the unfortunate timing of inflation figures.'
He adds that the increased inflation six months ago means businesses are getting a 'poke in the eye now, at the worst possible time'.
The organisation is suggesting that the government freezes the rate for two years, which would help companies to survive the recession and save UK jobs.
Data collected for the retail price index (RPI) shows inflation stood at zero per cent in February, a drop from 0.1 per cent in January, which the Confederation of British Industry (CBI) says gives good reason to scrap planned tax increases.
The proposed rise in the fee, which is paid by businesses to local councils, was based on the RPI in September, when it stood at five per cent, and does not take into account the recent drop.
Dr Neil Bentley, director of business environment at the CBI, says: 'Today's inflation figures show that the planned rise in business rates has been caused by the unfortunate timing of inflation figures.'
He adds that the increased inflation six months ago means businesses are getting a 'poke in the eye now, at the worst possible time'.
The organisation is suggesting that the government freezes the rate for two years, which would help companies to survive the recession and save UK jobs.
Comment by Graham Smith
Thursday 30th April 2009CBI has a microsite dedicated to business tax reform in the UK economy. www.cbi.org.uk/taxreform
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