London SMEs unite against unfair rates regime
New research from the Federation of Small Businesses (FSB), supported by the Mayor of London Sadiq Khan, has shown that the current business rates regime is disproportionately hitting companies in London and needs a radical overhaul.
The FSB and others have long called for better protection for small and medium-sized enterprises (SMEs) in London. They now propose raising the small business rates relief from £12,000 to £20,000 in inner London which would, of course, cover Lambeth SMEs.
The report takes aim at central government cuts to the body that oversees the payment of rates by businesses, the Valuation Office Agency (VOA). Cuts to the VOA have led to surveying errors and a backlog of appeals. It also highlights how the new discretionary relief scheme has fallen short.
London Mayor Sadiq Khan said: “It’s time that Ministers acknowledged the damage their excessive business rates hike is having in London and set out plans to create a fairer system. Of course London needs to pay its fair share, but the current system is unfairly skewed against the capital.”
Indeed, while London hosts 16% of rateable properties nationwide, it bears 32% of rates payable – an unsustainable figure that increases with every revaluation.
Khan also said that “the best solution would be full devolution of business rates to London, combined with genuine protection for businesses from sharp increases so that London, like the devolved administrations of Scotland, Wales and Northern Ireland, can act in the interests of Londoners, their businesses and the wider economy.”
Whether Sadiq Khan gets his full devolution of business rates is yet to be seen. For now, Lambeth’s struggling small businesses will have to wait for improvements to be made.