London’s councils applaud extension of business rates pilot
0London Councils, representing the capital’s 32 borough councils and the City of London, and the mayor of London have welcomed the decision in last week’s provisional local government settlement to renew London’s business rates pilot deal.
The pilot, which began in 2018/19, allowed the London councils and the Greater London Authority to retain 100% of additional business rates income not due to revaluation-related growth.
In 2019/20 the London bodies will continue to benefit from the scheme, but at a lower rate of 75%.
In a press release London Councils said: “Greater business rates retention, in exchange for lower levels of government grant, is a small but important step towards bringing London in line with most other global cities.”
Commenting on the new 75% rate, the mayor of London Sadiq Khan said: “Although I welcome the renewal of this important scheme, I am disappointed that it is at a lower retention rate than last year.
“Working with London Councils, we will continue to urge the government to agree to full devolution of business rates to the capital, so we can act in the interests of Londoners and their businesses.”
Kahn and the London Councils also pointed to the savage effects of the 2017 business rate revaluation, and called for a fairer non-domestic rates system.
London Councils said: “That revaluation meant that some businesses were hit with rates increases of much as 45% overnight on 1 April 2017, with London businesses facing a collective business rise of up to £1.2bn, which will fund an equivalent tax cut for the rest of the country.
“The next revaluation is scheduled for April 2021 and will be based on estimated rental values next April.
“The government must start planning now to ensure these huge rises are not repeated again in just over two years’ time.”
The chancellor announced a two-year relief discount for businesses hit by the increase in business rates, but this only applies to rateable values of less than £51,000.
London Councils points out that relatively few will benefit, as many of the capital’s businesses have rateable values above the threshold.
