Comment: the business rates rise in London is all of our business
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There was no reprieve for businesses in Philip Hammond’s budget last week, and for north London locals it’s personal
Another day, another looming disaster for London as the government stubbornly tries to apply a one size fits all approach to a much divided country.
As I predicted last week, there was no repeal on stamp duty announced in Philip Hammond’s Spring Budget.
Homeowners and estate agents weren’t the only ones bitterly disappointed in the budget.
There was no last minute reprieve for the business rates rise, which will see everyone from small independent shops and to big banks slapped with a hefty tax bill as of April 1
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The rate is tied to the estimated rental value of the property the business occupies. Owners will have to pay the tax regardless of how much profit they make.
The effect is more pronounced because the re-evaluation, which usually occurs every five years, was pushed back by two years so as not to interfere with the election.
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The rates were last set in 2008, and rents in the capital have risen sharply since then.
As with stamp duty, London will be disproportionately affected by the rates hike, and hundreds of our high street shops and pubs could go under.
A report from the Federation of Small Businesses, part funded by Camden Town Unlimited, makes for worrisome reading.
On average, a London micro businesses employing fewer than 10 people will have to find an extra £17,000.
74 per cent of the businesses surveyed said that the upcoming rates rise was the single biggest issue they were currently facing.
Even big chains will struggle to absorb the costs. The TGI Friday’s on Leicester Square will pay £2 million more in tax over the next five years.
It’s hardly the epitome of London’s culinary offering, but it’s a prime example of how mad this scheme is when applied to London’s already bonkers property market.
Everyone from fringe theatres in rooms above pubs to West End plays will have to scramble to find the extra cash.
Dinner and a show will only get more expensive for the average Londoner as businesses try to cover their spiralling costs.
We’re looking at a London where everyone stays at home inside their overpriced and undersized rental, drinking supermarket cider, whilst shopping online for products picked out for you by a human drone in a warehouse and delivered to your door.
(In a twist so dark it’s almost dystopian, the rates re-evaluation will see Mike Ashley’s Sports Direct warehouse in Derbyshire save almost £900,000. The company is currently at the centre of a scandal for paying its employees below minimum wage.)
How can I predict this bleak and dreary future? I know, because I’ve already lived in it.
My particular bête noire is when people refer to areas in and around Hampstead and Highgate as villages. ‘Try living in a village for five years,’ I want to cry, ‘see how you like it then!’
There’s nothing to do in England’s rural villages any more. The pubs are shutting. The village shop, if you’re lucky enough to still have one, is a chain. All there is to do is sit in a field drinking supermarket cider. The only shops available are online. My Saturday job as a teenager was in a supermarket as a human drone picking out other people’s internet shopping.
We’re so lucky to live in a part of the country that has an embarrassment of opportunities to shop locally.
Our new glossy interiors magazine Homestead launches on Thursday, and in it you’ll find a definitive directory of our best and brightest local artisans and shopkeepers in Hampstead, Highgate and beyond. Shameless plug aside, we cannot stand to lose them.
What’s the point of high rents if we can’t enjoy the benefits of city living? Not to mention the value added to your property by living close to what estate agents love to call ‘local amenities’. It’s mercenary, but if they go out of business it could negatively affect the price affect the price of your home.
North London is about to get a taste of what living in a real village could be like. This tax might be on businesses, but this time it’s personal.
You know the drill: go on protests, sign petitions, and write to your MP. But most importantly vote with your feet, and by that I mean footfall.
Go to your local shops, chat with their owners, spend your cash with them, then take them to your local and buy them a pint. Now is the time to show our support.