Businesses in London could face gigantic bills next year as the Government announce changes to business rates which could see rates jump by as much as 120 per cent.
Official analysis shows the biggest hikes will hit London retailers, whose business rates will rise by an average of 14 per cent. But for some retailers in heavily gentrified locations such as Shoreditch and Brixton, rates could more than double following the revaluation of properties.
The new rates will apply to businesses with a rateable value of more than £100,000.
Business rates are charged on most non-domestic properties, such as shops, offices, pubs, warehouses, factories and holiday rental homes, and are calculated by using the property’s open market rental value.
Under the proposal, tens of thousands of London firms will have just six months to adapt to the change and find the funds to pay the increased bills.
Thousands more smaller businesses are awaiting their new rates, which are due to be released by the Government on Friday.
A spokesperson for the New West End Company, which represents the retail destination in London, said the proposals were “extremely disappointing” and could be “catastrophic” for West End businesses who have until April 2017 to adjust to the new system.
“The suggested options will not lighten the burden and retailers profits will be hit in a fragile post-Brexit economy, leading to reduced investment and job losses around the UK,” he said.
Parliament said the new rates will ensure fairer bills for businesses across the UK, where many businesses will be unaffected or better off as a result of the changes. Ministers suggest that around 600,000 businesses will pay no rates at all under the new system.
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