Wednesday, June 29, 2022

Sadiq Khan: new business rates place ‘London‘s high streets under threat’

The Mayor of London has issued another warning over the looming business rates reforms, saying that independent and family-run businesses could be forced to leave the high street as a result.

Sadiq Khan said the character of local communities was also at risk, with London businesses facing a 45 per cent tax increase – or at least £900 million per year – due to the revaluation of rates that come into effect from April 1.

He also accused the government of not doing enough to help.

“The very nature of London‘s high streets is under threat,” Khan said.

“What we need is full devolution of business rates to London with genuine protections in place so we can safeguard businesses [that] are part of the fabric of what makes London such a vibrant, diverse and successful city.”

READ MORE: Business Rates: the Good, the Bad & the Ugly

Earlier this month, Chancellor Philip Hammond announced a £435 million relief package in the Budget to assist businesses who will be affected by the business rates revaluation.

Local authorities will have their share of the £300 million over the next four years to provide local businesses at their discretion, while London will receive £72.5 million this year only.

Hammond‘s relief package is also small compared to the the £28.8 billion the new business rates is expected to bring in for the Treasury in the first year.

According to The Guardian, London and Reading are the only cities in England and Wales that will face a rise in average business rates from the revaluation.

READ MORE: Parliamentary inquiry to be launched into business rates

The newspaper also highlighted how independent retailers would be particularly at risk as they will not be able to offset an increase in their business rates bill against decreases for shops in other parts of the country.

Khan‘s comments come after news that Communities and Local Government Secretary Sajid Javid will face further scrutiny over business rates next month.

On April 19, a government committee will analyse the progress of the proposals for local authorities to retain 100 per cent of business rates, as well as the recent rates revaluation.

This is the first time Britain‘s business and retail property has been revalued since 2010.

The incoming revaluation aims to spread the burden of business rates according to economic prosperity, with the tax paid calculated as a proportion of the value of their property. It also takes into account the annual rate of inflation.

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