Businesses in London face £7.5bn tax increase
Industry groups have warned of a London exodus if business rates are not cut, as new research predicts that firms in the capital will face a £7.5bn tax hike after next April’s revaluation.
Property consultancy Gerald Eve, who compiled the eye-watering estimates, predicts that businesses solely within the Square Mile will have to pay more than £2bn in extra tax over five years.
John Dickie, director of strategy and policy at London First, said the rate rise was “a very serious problem for London” and would push out smaller businesses, while Bryan Johnston from the British Retail Consortium warned that retailers would close stores in the capital – resulting in job losses.
Stephen Herring, head of taxation at the Institute of Directors, said that “not all [London] businesses have sufficient scale and profitability to meet the rates hike forecast” and called for a “radical reform of business rates” in line with an “increasingly globalising and digital economy”.
A spokesman from the Department for Communities and Local Government said: “These figures are pure speculation. It’s far too early to say what will happen in 2017, but the revaluation will ensure that all businesses are paying a fair amount based on the most up-to-date information.”