Together with other London BIDs, Business Organisations and the Mayor of London, Brixton BID is supporting the campaign to enable London to earn more money to pay for the increase in business rates.

Recently, Brixton BID added their name to an open letter that appeared in the 27th October edition of the Evening Standard. The link can be found here. The full open letter is below.

The 2017 revaluation of business rates will hit London hard. It could see the capital’s bill for business rates soar by an estimated £885 million annually — a significant extra tax burden for businesses in the capital. London will now be paying 32 per cent of the country’s total business rates

Companies are already investing in the National Living Wage, the Apprenticeship Levy and meeting the increased purchasing costs caused by the recent dramatic fall in the value of the pound. The timing of the revaluation in April is particularly sensitive as it will come at the same time as the Government has announced it will evoke Article 50.

At a time of unprecedented uncertainty for Britain’s economy, this huge rise in business costs is an unnecessary blow. Chancellor Philip Hammond says there is a case for the UK to “reset” fiscal policy in the wake of Brexit. London businesses face real difficulties in planning for this unexpected rise in rates bills. The transitional relief scheme is meant to enable businesses to manage the rate rise. The previous three revaluations have seen a cap on annual rises of 12.5 per cent and it was widely expected that a similar scheme would be introduced, but the Government’s preferred scheme proposes a cap on rate rises for large businesses of 45 per cent in year one.

Such large tax increases will have a real negative impact on investment, job creation and profitability for London businesses at a time when confidence and stability are needed more than ever. To help smooth the cost increases the Government should find the funding to finance lower caps without impacting on the cap on reductions, perhaps through the use of a “transitional pot”.

The Government should also support policies and projects that will enable London to earn the money to pay for these tax rises. The narrowing of the tax base and the difficulty in producing a transitional relief scheme that satisfies both businesses facing large increases and those expecting large decreases shows a structural problem with the current business rates system. This demonstrates the need for a fundamental review of business rates before the next revaluation.