Retailers will be forced to pay more in business rates in order to fund London’s Crossrail network.
Those shops affected in the capital will have to pay more after London Mayor Boris Johnson chose to introduce the maximum increase possible of 2p extra on their business rates, on top of the 41.4p in the pound of the rateable values they are already paying.
The additional fee will mean business rates will rise by 5% on properties affected.
The British Retail Consortium had called for lower business contributions to Crossrail. It argues that the Mayor’s decision will “severely” harm cash flow due to the “inflation busting business rates increase and the continuing failure to reintroduce empty property rate relief”.
BRC director of business environment Tom Ironside said: “Crossrail is much needed and long overdue but London retailers will pay out far more than their fair share.
“Requiring retailers to disproportionately fund Crossrail is wrong at any time but is especially ill-timed given weak consumer demand and high levels of unemployment.
“The Mayor should have significantly reduced retailers’ contributions to funding Crossrail. They’re going to be hit by a huge bill from rates revaluation and the impact of business rates postponed from last year. But shops will only see any benefit from their financial contributions by 2017 at the earliest and will continue funding the project until 2036.
“Retailers already contribute the largest share of business rates and this April’s revaluation is expected to raise London’s business rates by the greatest proportion of any UK region.”