Save London's high streets from business rate hike, says mayor

Sadiq Khan fears loss of vibrant and diverse character if family-run and independent shops are forced to close

Independent and family-run businesses could be forced off London’s high streets by the sharp rise in business rates that will come into force from April, spoiling the character of local communities, Sadiq Khan has warned.

The mayor of London said businesses in the capital faced a “clear and present risk” from the tax and accused the government of not doing enough to help.

Businesses in London will be hit with a tax increase of at least £900m a year due to a revaluation of rates, with firms facing a 45% rise in their tax bill, according to government data.

“The very nature of London’s high streets is under threat,” Khan said. “What we need is full devolution of business rates to London with genuine protections in place so we can safeguard businesses [that] are part of the fabric of what makes London such a vibrant, diverse and successful city.”

Philip Hammond, the chancellor, announced a £435m package of business rates relief in the budget. However, this is only a small proportion of the £28.8bn the tax is expected to bring in for the Treasury this year.

Hammond will hand £300m to local authorities over the next four years to offer discretionary discounts on business rates, but just £72.5m of this will be available to London this year. Furthermore, Khan has estimated that at least 1,000 pubs in the capital will not be eligible for the £1,000 business rates discount that Hammond also announced.

Independent retailers are particularly at risk from the business rates revaluation because they will not be able to offset an increase in their business rates bill against decreases for shops in other parts of the country. London and Reading are the only cities in England and Wales that will face a rise in average business rates from the revaluation.

This is the first time Britain’s property has been revalued since 2010. The revaluation is designed to spread the burden of business rates according to economic prosperity. The amount of tax paid by business is calculated as a proportion of the value of their property and also takes into account the annual rate of inflation.

Katrina Phillips, who runs an ethical interior design shop on Portobello Road in west London, said her business rates bill would increase by more than £10,000 a year.

“When the new business rates were announced, without exaggeration, I thought I was going to have a heart attack. I literally could not breathe,” she said.

“I have kept going through very tough times. I have strived to create a place of authenticity and beauty, something people are proud and relieved to be a part of. I will not be able to survive these increases. There is not enough money taken by small shops to bear these insane rents and rates.”

Noah Crutchfield, who owns three shops in Hackney, east London, said: “These increases will make it harder for small independent businesses in London to stay open, and many neighbouring businesses are already signalling they might have to shut.”


Graham Ruddick

The GuardianTramp

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