Vauxhall One , The Mayor of London, London Councils, London First, London Chamber join together to oppose proposals on transitional relief
London, 26 October 2016: Vauxhall One has joined London’s largest business organisations, the Mayor and London Councils to form a united and unprecedented opposition to the current system of business rates.
Responding to the Government’s consultation on transitional relief, an alliance including The Mayor of London, London Councils, London First, London Chamber of Commerce and New West End Company, with 37 additional groups including 31 London BIDS, has called for a full review of the effectiveness of the rates system, together with more realistic of the transitional relief proposals and mitigating proposals that will enable London businesses to generate the income needed to meet the rise.
The consultation follows a revaluation of rateable value from which some districts in London will see an increase in excess of 150% – a figure hidden by the Government’s official line of the average hike being 11% across the capital. London businesses are facing the possibility of an estimated £885million annual increase.
The Government’s proposed transitional relief scheme, which would see rises in year one capped at a maximum of 45%, does little to enable businesses to prepare for this significant rise. In the consultation response, the group argues that the risk of such an unexpectedly large tax increase, with just six months’ notice to prepare for it, will be a slowing of investment, job creation and profitability for business at a time when confidence and stability are needed more than ever. Without mitigating measures, the participating groups believe that businesses of all types will find it difficult to survive and grow, having a negative impact on the rest of the country in terms of supply chain, jobs and direct investment.
The group is calling for:
Chairman of Vauxhall One, Aseem Sheikh, said: “The proposed business rate revaluation, due to come into force in April 2017, will hit London businesses disproportionately. Central London businesses could face average business rate rises of over 22% although in many areas the increase will be far higher. The main shopping streets in London’s West End, for example, are likely to see an average 80% rise and many growing areas such as Vauxhall will experience increases above the average. In most cases the rise is not as a result of improved business performance but simply a reflection of the lack of supply of retail and commercial space.
These huge increases will therefore be a major new cost on central London businesses.Vauxhall One BID represents 200 businesses.We call upon the government to freeze the proposed business rate revaluation. If this is not possible, then to introduce a transitional relief scheme to limit any annual rise to no more than 12.5%.”
Deputy Mayor for Business, Rajesh Agrawal, said: “Our businesses are fundamental to the capital’s thriving economy, but with the uncertainty being created by Brexit, the last thing they need now is a hike in business rates on the scale the Government is proposing from next April. It is unacceptable that thousands of firms in the capital are in effect facing 50 per cent increases in their business rates bills with barely six months’ notice.
It is clear that we need far stronger transitional arrangements to soften the immediate impact and give businesses in the capital chance to plan ahead. We also need greater devolution over London’s business rates including local control over future revaluations, so we can invest more in supporting jobs and growth in London, which in turn stimulates the UK economy as a whole.”