Islington calls on government to freeze massive business rates rise
02 February 2017
Huge government increases in business rates could see local small and medium sized companies forced to close or move out of the borough, local business representatives and Islington Council have warned.
The Government has revalued the rateable values of businesses in Islington, and increased rateable values for business premises in Islington by an average of 45 per cent, the third highest rise in England.
Islington Chamber of Commerce and Angel Business Improvement District have launched a petition calling on the Government to freeze the implementation of the business rates valuation until after Britain leaves the EU. Islington Council is supporting the petition.
The petition also urges the Treasury to extend ‘transitional reliefs’ for affected businesses. Doing so would mean bills would increase at a lower rate, over a longer period of time – helping small and medium sized firms deal with the impact of a substantial rise.
The organisations are also asking the Government to assist small companies by increasing the threshold for Small Business Rate Relief in inner London, with national Government funding the higher relief.
Currently, companies can apply for the relief scheme in full if the rateable value of their property is less than £12,000 and at a tapered rate if it is between £12,000 and £15,000. The petition calls for the lower threshold of £12,000 to be increased.
Islington Council’s executive member for economic development, Cllr Asima Shaikh, said: “The decision by national government to massively increase business rateable values for local shops and businesses could have a devastating effect on the character of our community and force small and medium sized companies to close or move elsewhere.
“We urge the government not to go ahead with these plans and are offering local companies advice on how they can manage the changes ahead.”
Hak Huseyin, Co-Vice Chair of the Islington Chamber of Commerce, said: “The sudden increases in business rates will hit many firms hard. Alongside ever increasing rents and other business costs, the Government’s rate rise couldn’t come at a worse time for Islington companies. One of Islington’s strengths is the diversity of the types of businesses in the borough, and I am deeply concerned about the impact the massive increase in rates bills will have. We need the Government to think again and freeze the rate rise.”
The Chief Executive of Angel’s Business Improvement District, Christine Lovett, said: “High Streets that are alive and busy are a lifeline for local people and draw the community together. The increase in business rates could drive out the very businesses who not only keep our town centres vibrant but employ Islington residents.”
By 2020, Islington Council will have seen its central government funding cut by 70 per cent in a decade and has no control over the rateable values of business premises in the borough. The council’s funding will not increase as a result of local businesses paying more in business rates.
The petition is available here: https://www.change.org/p/chancellor-freeze-the-government-s-business-rates-rise-be78dc30-1e62-479a-b2c1-28b5cbc0c13b.
Islington Council also supports calls by London Councils for a separate business rates system for London.
- Small businesses in Islington (those with a rateable value below £28k) will see an increase in rateable values of 34%, with ultimate business rates bill being on average 30% higher.
- Medium-sized businesses (RV £28k-£100k) will see an increase in RV of 45%, with ultimate business rates bill being on average 43% higher.
- Large businesses (RV above £100k) will see an increase in RV of 48%, with ultimate business rates bill being on average 47% higher.
- Some 1,807 accounts (businesses may have multiple accounts for different premises) will see an increase in business rates of between £10k and £100k from April 2017.
- The council will see increases in its business rates bill of £2.6m by 2022 (including £1m impact on schools).