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Business Rates Revaluation: Update

post-image 2nd December 2016

In the Autumn Statement, the Government announced that, as a result of comments and representations made – largely by business interests – it will be changing the level of the cap on business rate rises for large businesses (those premises with a Rateable Valve greater than £100,000).  The upper cap will be reduced from 45% to 42% in Year one, and from 50% to 32% in Year two.  You can read the Government’s full explanation and justification here.  This is a better settlement for businesses, but many still face very large increases in their business rates liability from 1 April 2017.

Along with many other organisations in London, South Bank BID believes that the Government’s consultation on the 2017 Business Rates Revaluation was launched too late, resulting in limited changes to the Year one arrangements, and hence the bigger reduction to the Year two cap.

The Mayor of London has estimated that businesses in London will save a net £90m over the next five years as a result of the revised arrangements, with the changes benefiting approximately 7,700 business properties in the capital.

South Bank BID would like to thank all those businesses that helped with the campaign – to Government and to the media.  However, this isn’t the end of the campaign.  Along with other BIDs in London, South Bank BID believes that it’s time that the Government takes a fundamental look at the way in which London is taxed through the non-domestic rates system , as currently London’s businesses are penalised unfairly.

We are supporters of Lambeth Council’s ongoing campaign to fight the business rates hike which will so disproportionately affect London’s businesses at a crucial time for the capital in the wake of Brexit. You can see the Lambeth campaign video below. 

Cllr Jack Hopkins, Lambeth Cabinet Member for Regeneration, Business and Culture, is an outspoken supporter of the campaign to fight the hike. He said: “This huge rise in rates is incredibly unfair on businesses in London, and Lambeth in particular.

“We are a borough that looks to harness and encourage small businesses to grow, provide jobs and strengthen the local economy.

“We have a great track record in that, Lambeth has had the biggest rate of new business growth of any London Borough, yet this huge increase in costs, on top of the uncertain economic climate, increasing rents and staffing costs, puts all that progress at risk.

“Businesses of all sizes are rightfully worried about these rising costs and we are standing up to government alongside them to try and protect their livelihoods and those of the staff they employ.”

Many of the small business owners in Lambeth agree with Jack’s statements, and fear for the profitability of their businesses. Dominic Lake, Founder of Canteen restaurant, on the South Bank, said: “How serious is it? Very serious. Does it keep me up at night? Yes it does, because I’m responsible for 150 people just in my small business.  If my cost base rises – and there is a threshold I can charge for any of the items on our menu – there’s a crunch.  It’s a very serious commercial impact, not just for my business but any business in hospitality.”

Scott Leonard, Founder & Creative Director at The Champion Agency in Brixton, said: “SMEs face the most uncertainty they’ve ever faced – we’re in a very uncertain period within the country – to then levy them with a tax of up to 30% higher than what they’re currently paying is not acceptable.”

 

 South Bank BID is currently compiling further data and insight on the impact of the rises in business rates, and we’ll share this with you early in the New Year.

As always, if you require any further information on this subject, we are happy to help. Feel free to contact South Bank Employers’ Group directly by clicking here, and putting ‘Business Rates Revaluation’ in the subject line.