A group of more than 40 organisations have joined forces with the Mayor of London to lobby for business rates reform.
The alliance, which represents more than 16,000 businesses, has called for a full review of the effectiveness of the business rates system and “more realistic” transitional relief proposals.
The Mayor of London Sadiq Khan has been joined by the New West End Company, London First, the London Chamber of Commerce, the Federation and Small Businesses London and councils from across the capital in pushing for reform.
It comes less than a month after New West End Company chairman Sir Peter Rogers warned that transitional relief proposals were “extremely disappointing” and would be “catastrophic” for London businesses, which would have little time to adjust to business rate hikes of up to 80%.
London businesses face the possibility of an estimated £885m annual increase in business rates.
Retailers in prime locations in the capital such as Bond Street and Oxford Street face daunting jumps, while in locations in the Northwest such as Bolton, Oldham and Rochdale, retailers are likely to benefit from drops in rates of between 39% and 56%.
According to the alliance, the Government’s transitional relief scheme, which caps rises at 45% every year, “does little to enable businesses to prepare for this significant rise.”
The group claims that having just six months to prepare for the tax hike will spark “a slowing of investment, job creation and profitability” for businesses across London.
It added that businesses of all types would “find it difficult to grow” or “even to survive” unless measures are taken to reform the system.
The alliance is calling for:
- A realistic transitional relief proposal to enable businesses to plan properly for the large rate rises, as have previously been in place;
- Positive consideration of mitigating policies and projects that will enable London businesses to generate the income needed to meet the rise;
- A commitment to a long term review of the effectiveness of business rates as a way of taxing businesses.
Rogers said: “2016 has seen the Government deliver a series of setbacks to the West End retail sector – beginning with the rejection of crucial proposals to modernise the law on Sunday trading in March and now with this crippling revaluation of business rates.
“We are urging the Chancellor to kick-start an overhaul of the revaluation system and seriously consider measures such as annual revaluations and the possibility of separating London from the national system to ensure our capital is protected for the future.”
Deputy Mayor for Business, Rajesh Agrawal, added: “It is unacceptable that thousands of firms in the capital are in effect facing 50% 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.”