March 15th 2017 is 'Rent and Rates Freedom Day'

FSB London Data shows March 15th 2017 to being ‘Rent and Rates Freedom Day’ for small businesses in the capital.

New Data released by the Federation of Small Businesses in London shows that the average micro and small business (with commercial premises) is now paying 13.5% of their turnover on rents and 6.5% on business rates. It means March 15th 2017 will be the date when they are free from paying these fixed costs.

The FSB surveyed over 200 micro and small businesses across London and found that almost a half (46%) of London small businesses will miss out on business rate exemption when the level is set at £12,000 from 2017; and a further 18% are uncertain if they will be exempt.   The average rateable value of a property in the capital exceeds the next closest region (the South East) by around £23,000 and so the FSB in Greater London are arguing that the upcoming 2017 Revaluation meets the needs of London’s small businesses who face the highest business costs.

There are encouraging signs for small businesses who have not yet filed their application for business rate relief with their London council as the data showed that nearly seven in 10 (69%) small businesses in London were successful with their application for some form of business rate relief in the last three years.

London billing authorities are forecast to collect around £7.3bn in business rates income by 2020 – and with two likely Business Rates Supplements in place from 2020 (in the form of Crossrail and a potential Crossrail 2), combined with the upcoming Revaluation in 2017, small firms are urging a swift political steer from the Mayor of London to lobby the Government on the need for a positive deal for London.  

The new data shows how London shows that clarity on how Business Rates are set across the capital must be a Mayoral priority.

FSB London believes that:

• The Revaluation of business rates, and future rate thresholds, must show fairness to London small businesses fully considering the high costs of doing business in the capital.
• On the issue of greater devolution of business rates, the Mayor and London Assembly should make sure there is a significant level of independent business and LEP scrutiny in the form of ‘checks and balances’ to protect micro and small businesses before any new business rates system is consulted on.
• The Greater London Authority should put in place a model that would protect small businesses from any perceived risk of unreasonably high rate increases, in consultation with business and the LEP. We believe that putting in place robust governance arrangements, potentially through referenda, and in direct consultation with local authorities, the LEP, the London Assembly and most importantly the FSB and London’s businesses themselves – would make the system fairer and more accountable.