Business rates rise raises concerns for Havering’s smaller companies
- Credit: Archant
A change in the way business rates are calculated could see small and medium-sized enterprise (SMEs) bills increase by 45per cent.
Companies in London face an 11pc average increase in their business rates, and with 99pc of Havering businesses classed as SMEs, one in four say they fear they will have to consider closing down, according to a survey by the Federation of Small Businesses (FSB).
An SME is a business which employs 250 people, or less, with 7,765 companies, out of 8,495 SMEs, in Havering employing fewer than 10 people.
Labour London Assembly Member, Tom Copley, said fifth of small businesses in the borough will have to consider cutting staff or relocating.
“This really is a reckless move by the government,” he said. “By not taking into account the unique reality smaller businesses in London face, they risk causing real damage.
“Small and medium sized enterprises are the lifeblood of our local economy.”
Whilst the rest of the country is set to benefit from the changes, London businesses will be affected as the rates are based on how much their property is worth in the rental market.
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With rent prices falling across the country, except in the capital, London is set to be the only region that will see an increase in business rates.
Mr Copley raised fears that the changes will not just affect smaller businesses and their employers, but will also have an impact on the wider community.
“We are talking about cafes and corner shops – the very character of the community. They shouldn’t be penalised for operating in London as opposed to other parts of the country.
“The Chancellor must urgently review these changes ahead of next month’s budget, and increase the number of small businesses in Havering who can claim rate relief.”
SMEs can apply for rate relief and Mr Copley, the FSB and the Mayor of London, Sadiq Khan, have backed calls to raise the rate relief thresholds in London.