Local traders have expressed anger at a looming “tidal wave” of tax that is set to hit businesses in April.
Business rates are not set by local authorities. They just collect it for central government.
Business rates in Hackney, for example, are likely to balloon by an average of 36.5 per cent this year, following the first revaluation of business premises since 2005. Tower Hamlets will also see one of the steepest increase in rates in the Greater London area.
Companies rated above £50,000 will also see a further 2 per cent increase on the official estimate of the property’s value under conservative Mayor of London Boris Johnson’s new business rate supplement to help fund Crossrail. It is estimated this will cost the borough £150,000 annually.
Similarly, in the borough of Croydon, businesses with rateable values of more than £55,000 will also have to pay an extra 2 per cent.Rosanne Berry, chair of the Stoke Newington Business Association, said: “Businesses are struggling. We have had a quiet few months and we learnt that in April we each have around an extra £100 a month to pay, maybe more for bigger businesses.
“It’s going to have a big impact on businesses. It’s a lot of extra money to pay out every month.
“I can’t speak for everybody, but none of us around here are happy about it while the council freezes council tax.”
Matthew Coggins, leader of Hackney’s Conservative group, criticised the extra financial burden that is likely to be placed on businesses, having only just emerged from the recession.
“It’s going to have an absolutely shocking effect on businesses in Hackney,” he said. “It’s unbelievable that this is happening when we are just about managing to claw ourselves out of recession.”
Richard Abbott, chief executive of Hackney business support charity, HBV Enterprise said the hike was “pretty outrageous” for small businesses but added, “There are support mechanisms to help businesses.”
“I can understand people whinging, it’s human nature to whinge, but the smart thing to do is to say ‘This tidal wave is coming towards me, I can’t stop it. What can I do?’ It’s about planning. It’s about strategy. It’s about understanding markets.”
The council’s annual budget report said it would allow businesses to defer payments for this and the next two financial years. It will also assist some small businesses with a rate relief. For smaller businesses based in Lewisham see Lewisham.gov.uk/businessrates for more information. Check your local authority’s website for more information.