Mayor of London calls for urgent reform of business rates
The mayor of London has called for an urgent reform of the business rates system to help the capital's long-term recovery from the coronavirus pandemic.
Sadiq Khan said the government should not take for granted that life in London would return to normal once restrictions are lifted.
Before the Covid-19 pandemic, London was due to generate more than £10b in gross business rates – a third of the national total.
Currently business rates are based on valuations from 2015 which came in to force in 2017.
A re-evaluation of properties took place in 2019 and was due to come into effect in 2021, but this has been delayed due to the pandemic.
Business rates will now change in 2023 and be based on property values as of 1 April 2021. This means operators face paying the tax based on the 2015 valuation for another two years.
A report commissioned by Khan warns that this could mean rates bills could stay higher for longer and not reflect current market rents or local economy performance.
With this in mind he has urged the government to extend the current business rates holiday for hospitality, retail and leisure businesses beyond March and the furlough scheme beyond April.
Khan said: "Covid-19 has had a devastating impact on central London's economy, with retail, hospitality, culture and night time industries bearing the brunt.
"When London thrives, the whole country thrives, so supporting our city's businesses to survive the coming months will be absolutely vital. This must include the continuation of the furlough scheme, the business rates holiday, and the hospitality VAT reduction.
‘With the right support from the government, more businesses will survive and contribute to what this report shows could be a rapid recovery, once tourists and commuters return in numbers."
Last year the Treasury wrote off business rates bills for the retail, hospitality and leisure industry for the current financial year to the tune of £10.13b.
A minister has suggested that further support could be included in the upcoming Budget, telling councils that they should "consider issuing business rates bills after the chancellor has set out his plan" on 3 March.
