Chancellor urged to protect small firms from double whammy'
PUBLISHED: 18:48 20 March 2009 | UPDATED: 14:12 05 October 2010
LOCAL authorities across London are urging the Chancellor to protect small firms from a tax double whammy.' A five per cent rise in the figure to work out this year's Business rates, coupled with the end of transitional relief' which previously cushioned against large increases, will prove damaging to small businesses, they warn
LOCAL authorities across London are urging Chancellor Alistair Darling to protect small firms from a tax double whammy.’
A five per cent rise in the figure used by Government to work out this year's Business rates, coupled with the ending of transitional relief which previously cushioned against large increases, will prove damaging to small businesses, they warn.
The rates paid to Whitehall are collected by local authorities based on the Government’s estimates each year, then multiplied by property value using the inflation rate from the previous September.
TAX UP-BUT INFLATION DOWN!
This was five per cent in 2008, which means small businesses could be paying up to £500 extra because of London’s high property values, especially in districts like Canary Wharf and the City Fringe.
But inflation fell to 2.4 per cent by January because of the recession and looks set to fall further.
It means London slapped with huge business rate rises in a year when the economy continues to plummet, the London Councils lobby representing the town halls points out.
The organisation has written to the Chancellor this week urging him to lower the rate calculated and to increase the threshold on empty property exemption from £15,000 to £21,500.
The local authorities are backed by the London Chamber of Commerce which says firms are facing their toughest time in years and “the last thing they need is a rates rise above inflation.”