A sharp rise in business rates for offices in the City of London is threatening to undermine the Square Mile’s drive to remain a key financial centre in Europe after Brexit.According to research conducted by property agent CVS business rates bill for offices in the City will rise by £1.4bn, or 33%, over the next five years. Business organisations such as the Federation of Small Businesses and British Chambers of Commerce have heavily criticised the rate hikes. It is important that the City of London supports the pressure on Government to reconsider implementation.
The business rate rise means the 12,348 office addresses in the City will see their overall rates bill rise from £876m in this financial year to an average of £1.16bn a year over the next five years, according to property agent CVS.
The bill will be picked up by occupiers of the offices, and is a new blow to the City’s banks, law firms and insurance companies as they weigh up their options after Britain’s vote to leave the European Union.
In addition, nearly three-quarters of small companies in London say business rates are the most important issue they face, piling further pressure on the government over the controversial tax.
In a letter to property representatives the Mayor of London said he is working with the local authorities in London to push the government to devolve more responsibility for the tax to the capital. This could allow London to be “decoupled” from national revaluation arrangements, he said, by valuing its own properties and setting its own tax.
With this in mind we should explore how the City of London can control its own business rates to avoid businesses large or small going bust or leaving the Square Mile. Or as CITY A.M. asks just scrap it?