Businesses in Hackney are expected to be the worst affected in England by the government’s proposed revaluation of business rates.
Despite Chancellor Philip Hammond’s £6.7bn business rates reduction package announced during the Autumn Statement yesterday, businesses in Hackney are expected to see an overall average increase in rateable value of 46 per cent, starting next April.
Hackney Council protested to Chancellor Philip Hammond about the proposed rise in business rates and its impact on local businesses ahead of today’s Autumn Statement.
Due to be implemented on April 1, 2017, the current proposals could see more than 370 businesses in Hackney facing a rise in rates between £10,000 and £100,000.
The amount a business pays depends on the area’s average property rental value, size of property and if it is eligible for relief.
F.Cooke, a traditional pie and mash shop on Broadway Market, could potentially see a 60 per cent increase in rateable value of their property – greatly impacting their business.
Anne Cooke, co-owner of the shop, said: “We’ll still be here, we’ve been doing this for over 100 years. Our grandkids will take it over in time. But the flats are now occupied by city workers, and many businesses move on quickly because of the high rates. It’s as if the council haven’t remembered people like us here.”
Hackney would see an overall average increase of 46 per cent in its business rateable value, higher than any other London borough, and five times that of the regional average.
Since the last revaluation of business rates in 2010, East London has seen a dramatic rise in rates due to the continuing increase of property rental value in areas like Shoreditch and Dalston.
Broadway market has long been a focal point for debate over issues of gentrification in the area, with an influx in recent years of new cafes, restaurants and food stores.
Source: VOA administrative data
Specialist kiosks, showrooms and pharmacies attached to surgeries are expected to receive the greatest increase in business rates rateable value within the retail sector across London. General shops are predicted to see an average rise of 35 per cent.
Guy Nicholson, cabinet member for Planning, Business & Investment at Hackney Council, wrote to Chancellor of the Exchequer Philip Hammond on November 11, proposing the new rates be frozen until 2020 when Brexit negotiations should be completed.
In the letter, Nicholson said: “All [businesses] are now at risk of sliding into stagnation, forcing relocation instead of expansion, and replacing job creation and thriving business clusters with unemployment and empty buildings.”
Nicholson has also requested a dedicated Valuation Office for London in order to better understand the unique property market in the capital.
Local businesses can appeal the new business rates value of their property, but a Freedom of Information release from the Valuation Office Agency revealed only seven per cent of businesses have registered and been contacted.
Ben Hillwood-Harris, owner of Artwords Bookshop in Shoreditch said: “We received a letter about the rates revaluation, but we’ve since tried a few times to check our new rates online but gave up, it’s not clear from the link provided in the letter.”
“we’ve been doing this for over 100 years. Our grandkids will take it over in time. But the flats are now occupied by city workers, and many businesses move on quickly because of the high rates.” – local business owner, Anne Cooke.
A Hackney Council spokesperson said they would be contacting local businesses about the new proposed business rate value after the Autumn Statement.
Hammond said his Autumn Statement business rates announcement “is complicated, but a good thing”, for businesses. Some parts of the country will see business rates decrease where property value has fallen and large companies with rates of over £100,000 will see a greater phasing in of the tax than expected.