business rate revaluation

Meeting: 
MQT on 2016-10-19
Session date: 
October 19, 2016
Reference: 
2016/3929
Question By: 
Andrew Dismore
Organisation: 
Labour Group
Asked Of: 
The Mayor

Question

Further to Question No: 2016/3376

What assessment have you made of the potential impact on London of a business rate revaluation?

Your response being:

'It is difficult to predict with certainty the precise impact of the business rate revaluation in London. Forecasts suggest that the total in London could increase by around 10% £700 million but the precise details will not be known until the valuations for each property are published by the Valuation Office on 30 September. These assumptions were reflected in my predecessor's final budget.

The largest increases are likely to be in central and inner London; some - mainly in outer London - could fall. I am committed to ensuring that any increases in bills are phased in as slowly as possible - ideally with limited changes in 2017-18 - and I will work closely with business organisations in London to campaign against any rises that will damage the city's competitiveness.'

The valuations for each property were published by the Valuation Office on 30 September as you anticipated, can you now give a clearer answer as to the impact especially on SMEs in London generally, and on businesses in central London; and what representations if any do you propose to make?

Answer

Answer for business rate revaluation

Answer for business rate revaluation

Answered By: 
The Mayor

The draft 2017 rating list was published on 30 September and the Government's consultation on the transitional relief scheme to phase in the impacts on rates bills was published two days before.

Rateable values in London will increase by an average of 23 per cent - well above the national average increase of 9 per cent. As revaluations are revenue neutral London business rate payers will see their underlying rates bills increase by £909m or 11% - with every other English region seeing average bills fall.

However this masks significant variations across the capital as the highest increases are concentrated in central and inner London boroughs with retailers and licensed premises in the West End and other parts of inner London seeing relatively large rises. By contrast average rates bills in several outer London boroughs will change only marginally and in some cases fall.

The Government's preferred transitional relief scheme will result in some larger properties in London facing increases in rates bills of nearly 50% as soon as next April. The GLA will be joining with the business community to encourage the Government to introduce a much lower cap on increases in 2017-18.

Once London boroughs and the GLA gain some limited additional control over setting business rates from 2019-20, we will be able to take steps to improve the fairness of the tax - including reviewing the thresholds below which small businesses are exempt from paying business rates as these are the same in London as in the rest of England.