Small businesses across London will be faced with hikes to their business rates bills, with councils across the capital set to collect around £8.8bn over the next year. A third of the total business rates collected in England.
The third year of the business rates revaluation period, which began on 1 April 2017 in England and Wales, starts today, meaning thousands of firms will lose transitional caps on their rising bills.
Nationally, business rates are set to generate £25bn for local authorities in England this year. Of The 10 local authorities that which will collect the most from rates over the next 12 months, seven are in London: Westminster (£2.2bn), City of London (£1.2bn), Camden (£650m), Tower Hamlets (£461m), Birmingham (£449m), Hillingdon (£384m), Leeds (£378m), Manchester (£335m), Kensington and Chelsea (£332m) and Southwark (£328m).
The hikes come as firms across the UK brace themselves for a week of new cost increases and reporting requirements, with the Federation of Small Businesses (FSB) calling on government to support those impacted and rule out the introduction of fresh burdens.
Elsewhere, with the new personal tax year starting on Saturday small business owners will be required to put more aside for employees saving into auto-enrolment pension schemes. The minimum total contribution to such schemes will rise to 8% of an employee’s qualifying earnings, up from 5% last year. Employers will be required to shoulder 3% of the contribution.
The changes take effect at a time when small businesses in the capital face the uncertainty of Brexit decision making and the upcoming Ultra Low Emissions Zone that comes into operation next Monday.
FSB London policy chair, Sue Terpilowski OBE said,“This truly is blue Monday for small business owners, and it comes at a time when confidence is already in the doldrums. With the Ultra-Low Emissions Zone kicking off next Monday – we need politicians to understand how all these added costs of doing business weigh most on the shoulders of the self-employed and small businesses.
“Business rates is an unfair, regressive tax that hits small firms before they’ve made their first pound in turnover, let alone profit. The help won from government to support those hurt most by the 2017 revaluation is now falling away, leaving many small businesses with a 20% hike to their bills plus an inflation-linked increase.
“Business rates are one of the biggest burdens looming over small firms, and these are set to rise yet again next month. On top of this, the rates multiplier that applies to larger premises with a rateable value of £51,000 or above in England, will rise above 50p for the first time, from April.
“In London we are calling for a weighting system for small businesses to take into account the high cost of commercial property in the capital.”