Business rates

Meeting: 
MQT on 2017-12-14
Session date: 
December 14, 2017
Reference: 
2017/5234
Question By: 
Fiona Twycross
Organisation: 
Labour Group
Asked Of: 
The Mayor

Question

What has the impact of the increased business rates been in London since April?

Answer

Answer for Business rates

Answer for Business rates

Answered By: 
The Mayor

On 1 April 2017 new valuations were introduced for all 1.8 million non domestic properties in England including the 302,000 in London.  As a result of the relative change in rateable values (notional rental levels) since the last revaluation in 2010 business ratepayers in London have seen their rates bills increased by over £1.2 billion before potential reductions for valuation appeals. These increases will be phased in for smaller and medium sized properties under the Government's transitional relief scheme but around 6,000 ratepayers of larger properties with rateable values above £100,000 saw increases in their actual bills of 45 per cent overnight on 1 April. 

The impact, however, varies significantly across London by borough and sector. Hackney and Islington saw average rises in valuations of more than 45 per cent with some outer boroughs seeing minimal changes. In Westminster offices saw average increases in valuations of 13 per cent whereas the increases for retailers and the businesses linked to the night time economy averaged more than 50% and 70% respectively.

I lobbied successfully with the London Business community and London Councils to persuade Ministers to amend the transitional relief scheme which phases in increases in bills. This concession saved London businesses around £90 million over the next four years.

I also welcome the limited additional relief schemes announced by the Chancellor in the Budget  last March. These included

       a scheme capping rises for small businesses losing eligibility for small business rate relief to £600 per annum for the next five years which will benefit around 5,000 small firms in the capital - mostly in inner London;

       a £1,000 one off discount for pubs with a rateable value below £100,000. This will benefit up to 3,000 pubs in the capital; and

       a local discretionary relief scheme administered and allocated by London boroughs and the Corporation of London individually subject to the requirement to consult on their schemes with the GLA. London has been awarded £124 million from the £300 million national pot over four years - of which £72.5 million is available in 2017-18.  London's allocation will drop to £35.2 million in 2018-19, £14.5 million in 2019-20 and to a mere £2 million by 2020-21.

However, these were announced very late in the day after 2017-18 bills had been prepared by many billing authorities and remain of course a mere drop in the ocean compared to the £1.2 bn plus increase in business rates faced by ratepayers in London as a result of the revaluation. 

I will also be pushing for the administration of business rates to be fully devolved to London government prior to the next revaluation in 2022 similar to the arrangements already in place in Scotland, Wales and Northern Ireland. It would be possible to mitigate the impact of future revaluations more effectively if the Government fully devolved decisions over business rates to the Mayor and London boroughs.