1. What is RPI Rent Increase?

The Retail Price Index (RPI) rent increase is a method used in the UK to calculate allowable rent increases for tax and commercial lease purposes. It's based on the annual inflation rate as measured by the RPI.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( RPI \) — Retail Price Index percentage (inflation rate)
• \( Current Rent \) — Existing monthly rent amount in GBP

Explanation: The RPI percentage is divided by 100 to convert it to a decimal, then multiplied by the current rent to determine the increase amount.

3. Importance for UK Tax Purposes

Details: RPI-based rent increases are commonly used in commercial leases and are recognized by HMRC for tax calculations. They provide a fair, inflation-linked method for adjusting rents over time.

4. Using the Calculator

Tips: Enter the current RPI percentage (available from the UK Office for National Statistics) and your current monthly rent. The calculator will show both the increase amount and the new total rent.

5. Frequently Asked Questions (FAQ)

Q1: Where can I find the current RPI rate?
A: The UK Office for National Statistics publishes monthly RPI figures on their website (ons.gov.uk).

Q2: Is RPI the same as CPI?
A: No, RPI (Retail Price Index) and CPI (Consumer Price Index) are different measures of inflation. RPI typically runs about 1% higher than CPI.

Q3: Can landlords always use RPI increases?
A: Only if specified in the lease agreement. Some leases may cap increases or use alternative methods.

Q4: How often are RPI rent increases applied?
A: Typically annually, but this depends on the lease terms.

Q5: Are RPI increases tax-deductible?
A: For businesses, rent increases are generally allowable expenses, but specific tax advice should be sought.