It has been estimated that around 100,000 businesses in London are likely to experience an increase in their business rates in April.
According to Altus Group, 93,990 business premises will see tax rises of more than three per cent when demands for 2018/19 fall due for payment in April.
It was announced last year that business rates would increase annually in line with September’s lower Consumer Price Index (CPI) of three per cent.
Under the revaluation of business rates, which came into effect on 1 April 2017, businesses can benefit from transitional relief, which promises to spread the large increases to the business rate bill over the five years of the new valuation regime.
The increase limits for 2018/19 are 7.5 per cent for small properties, 17.5 per cent for medium and 32 per cent for large properties. This is in addition to the effects of September’s CPI rise of three per cent.
Small properties are defined as those with a Rateable Value of less than £20,000 and £28,000 in London, while medium-sized properties have a Rateable Value of up to £99,999. Anything over this limit is regarded as a large property.
The current Rateable Value of properties in London is set by the open market rental value on 1st April 2015 and will determine tax bills for business rates for the next five years. Rateable Values rose by 23.37 per cent overall across London following last year’s revaluation.
Further detailed analysis by Altus Group shows there are 50,869 small premises, 35,652 medium sized premises and 7,469 large premises across London’s who will collectively see their business rates bill increase by £379.78 million.
Those worst affected will be larger business, who will shoulder around £233.92 million worth of increases, meaning that on average they will see their bill rise by £31,319 each.