Autumn Statement leaves London ratepayers £500m worse off
Business rates rises in April ‘limited’ to 42% – compared to 12.5% after last revaluation
London’s business rates payers are £500 million worse off as a result of the Chancellor confirming the transitional relief arrangements for next April onwards at today’s Autumn Statement.
Under the arrangements, large businesses facing increases in their rates bills as a result of the 2017 ratings revaluation will see their first-year rises capped at ‘only’ 42%. But this compares to a cap after the last revaluation of just 12.5% – and with London companies facing some of the biggest increase in bills, the capital’s firms will be £500 million worse off next year as a result of transitional relief not being set at the same level as 2010.
The cap was set following a consultation, within which the Government initially proposed first-year transitional relief of 45%. Only 6% of business respondents to the consultation favoured the Government’s proposed scheme.
Jerry Schurder, head of business rates at Gerald Eve, said: “For the Chancellor to portray a transitional relief cap set at 42% as some kind of victory for business and ‘complicated but good news’ is technically correct but in practice pathetically inadequate.
“For London’s businesses the choice of a 42% cap, rather than the 12.5% seen at the last three revaluations, equates to an extra £500 million in rates bills next year alone, indicative of a Government that views the capital as a cash cow to be milked.
“London already contributes an outsize proportion of tax revenues to Exchequer, and with this cap the Chancellor is risking killing the goose that lays the golden eggs. This threatens to be the straw that breaks the camel’s back, and I have no doubt that firms will go to the wall, or relocate from London, as a result.”