The Heart of London Business Alliance (HOLBA) - which represents over 500 businesses in the West End - has issued an urgent warning over a looming £2 billion increase in business rates expected next April, which could threaten the survival of businesses across the capital.
The business association is urging the Government to replace the outdated business rates model with a fairer and smarter solution.
HOLBA’s analysis shows that business rates for central London could rise by an estimated 26% due to rateable values increasing by an estimated 5-20%, a new higher rate multiplier that could cost firms an estimated £1bn, and the removal of the £110k cap on sector reliefs that could lead to a further £700m in costs.
All of this comes despite London already contributing £9 billion annually in business rates - representing a third of the national total.
Ros Morgan, chief executive of HOLBA, said: “Businesses in the West End and across London are staring down the barrel of a huge tax hike — with no justification or reform. The current business rate system places disproportionate pressure on physical businesses that drive economic activity and footfall. HOLBA is currently working on a solution to help the Government finally fix this broken system and protect our economic future.”
Ojay McDonald, chief executive of the association of town and city management, added: “Business rates desperately need to be modernised. With the growth of digital technology, they simply don’t reflect 21st Century economic activity anymore.
“This isn’t just a London problem, but a problem for high streets across the country.”
“We’ve reached a crossroads. This isn’t just a London problem, but a problem for high streets across the country. While we’re delighted that smaller businesses will benefit from a lower multiplier, if the big footfall generators, they are co-located with, must close, because of increased costs, then everybody loses out.”
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