Business rates revaluation 2017October 21, 2016
The 2017 revaluation of business rates will hit London hard. Rates will go up overall by 11% in London, all other regions will fall on average, therefore this marks a huge tax shift to London. The system is clearly unsustainable and damaging London’s economy. At a time of uncertainty around future economic growth this is not good public policy.
London First, is coordinating a joint submission to the consultation on transitional relief with other business member organisations in London. The net burden of business rates is being shifted to an ever smaller pool of ratepayers in London. This is largely due to the artificially imposed constraint that business rates must raise a fixed amount of revenue every year.
We have set out our emerging positioning on business rates below:
- London generates 30% of BR yield in England and, if revaluation arrangements continue alongside trends in growth, this share could rise to almost 60% by 2040 according to GLA Economics
- Only London’s rates are going up overall by 11%, all other regions will fall on average, and in addition infrastructure and utilities providers are facing a major hike in rates of around 40%
- The decision to exit the EU has resulted in uncertainty and there is a consensus amongst business of a slowing of growth in London relative to pre-referendum forecasts.
- We do not think it its good public policy to do anything that damages London at this time, but recognise that the rest of the country (and indeed parts of London) need the relief to help their own growth
- We are proposing that the government find the money to smooth the big hike in rates; capping increases in London while passing on the relief to other parts of the country
- In the long-term the system is clearly unsustainable. There is a general consensus that business rates should remain a property-based tax, but reform is needed.
Contact: David Lutton, firstname.lastname@example.org