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17 February 2017

FSB data shows the need for the Chancellor to act on Business Rates at the Spring Budget

The Federation of Small Businesses (FSB) and Camden Town Unlimited Business Improvement District (CTU) are today urging the Chancellor to make a London business rate concession as a new survey of businesses in the Capital showed that the average micro businesses (with less than 10 employees) will be paying £17,000 in Business Rates in April 2017 (This equates to a Rateable Value of around £35,000).

Three quarters (74%) of businesses who responded to the FSB Survey said that ‘Business Rates’ was the single biggest issue affecting their business, followed by 36% who said ‘economic uncertainty’, and, one third (33%) who answered  that issues ‘recruiting the right staff’ was the main issue.

Four in ten (40%) businesses who are paying business rates told FSB that they expect to see an increase of above 20% in their Business Rates; whilst three in ten (31%) are simply unsure of what the change will mean to their business.

FSB and CTU are calling for the Government to create an increased inner and outer London Small business rate relief (SBRR) threshold that reflects the specific problems faced by small businesses in the capital.

  • In inner London FSB are calling for the threshold to be £20,000 Rateable Value for 100 per cent relief tapering to £23,000. 
  • In outer London where rateable values have increased by a lower percentage, we believe the threshold for 100 per cent relief should be set at £15,000 tapering to £18,000.

FSB estimate that increasing the thresholds to £15k in outer London and to £20k in Inner London would cost around £100m. This is a comparatively small amount in the context of the £28bn revenue derived from business rates nationwide.

FSB London Chair, Sue Terpilowski OBE, said:

“London is in serious danger of losing its vital support system of micro and small businesses. The average micro business will have to find £17,000 to cover business rates from April this year. But this increase must not be viewed in isolation as small firms will face an extra £2,600 in additional employment costs from Government policy in the 2017/2018 tax year, inflationary increases and a further increase in pensions auto-enrolment Costs.

“The business attraction of London is that it has a strong ecosystem of support services from the micro and small business community. Some of these businesses are the ones that become high growth companies from a standing start, often in the high tech sectors. We must ensure that this support system remains in place to keep the UK economy and the London economy thriving. We need to realise that the hard costs of operating a business in the Capital are starting to outweigh the benefits which simply does not make economic sense – and so tacking these burdens at the Spring Budget is critical.”

Simon Pitkeathley, CEO of Camden Town Unlimited (CTU), said:

“This research confirms what we have been hearing from the businesses we represent. The new business rates will drive firms out of London, force some businesses to cut staff or close down altogether. Given the importance of London’s economy to the rest of the UK, this will have destabilising consequences. Make no mistake, if London’s businesses take a hit, the rest of the country will feel it.”

FSB Rateable value london map

business rates london data