A host of companies face collectively paying £575.6 million extra in business rates on London properties after missing out on certain support measures announced by the Chancellor, it has emerged.
Data provided to the Evening Standard by real estate advisory firm Altus Group shows there are 61,650 non-domestic properties in the capital with a rateable value of more than £51,000, the threshold for the freeze to the small business multiplier announced by Jeremy Hunt yesterday.
This will cost them about £575.6 million in extra rates.The freeze is aimed at protecting over a million ratepayers from the impacts of inflation, but the standard multiplier (paid by properties with a rateable value of £51,000 or more) will be uprated by September’s CPI next April (6.7%).
Paul Noble, a partner at accounting firm Blick Rothenberg said: “Whilst a cut in business rates will be welcomed by hospitality and retail businesses, the effect in London will not be as effective compared to other parts of the UK with lower property prices.”
Kate Nicholls, who leads trade body UKHospitality said: "Across the UK one in five hospitality businesses are in the higher business rates tax band but in London that rises threefold because properties are larger and of higher value because of their location."
She added: "This means a large proportion of independent small hospitality businesses in London will not benefit from the Chancellor's freeze."
The rates support package is worth £4.3 billion over the next five years. It comprises a rollover of 75% retail, hospitality and leisure relief for 230,000 properties as well as the small business multiplier freeze.
Altus Group said the freezing of the small business rates multiplier for another year coupled with the extension of the 75% discount for occupied retail, leisure and hospitality premises for 2024/25 will save the average shop £11,728, restaurant £16,507, pub £12,869 and café £6,072 in business rates next April.
The Chancellor yesterday outlined a raft of measures to support businesses, including making permanent a tax break that allows companies to deduct the full cost of investing in machinery and equipment from their tax bill.
A firm can now permanently claim 100% capital allowances on qualifying main rate plant and machinery investments, meaning that for every pound invested its taxes are cut by up to 25p.
