High costs are hitting small firms
Small Business Rate Relief (SBRR) thresholds for inner and outer London will stand nationally at £12,000 on 1 April 2017, new research by Ramidus Consulting has shown.
Data shows that around 46,000 firms claim SBRR in London, around 10 per cent of all enterprises. Furthermore, the research shows that in London’s Central Activity Zone (CAZ), 81 per cent of office occupiers are in small units but take up in the City of Westminster of SBRR is only one per cent.
The Federation of Small Businesses is calling on chancellor Philip Hammond to “create an increased inner and outer London SBRR threshold that reflects the specific problems faced by small businesses in the capital”.
In inner London we believe the threshold should be £20,000 RV 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.
Sue Terpilowski OBE, London Policy Chair, Federation of Small Businesses, said: “The draft bills are hitting the shop floors of small firms across London and the mood amongst businesses is of great concern. It is clear from the research that small business space needs to be a long term priority in Sadiq Khan’s future ‘London Plan’ but [in the short term] the most pressing concern is the hike in business rates facing small firms. “Small business’ decisions on where they will locate, at the time of renewal, will be forefront in their minds. The draft 2017 business rates for a significant percentage of our members are staggeringly high and the Chancellor must address this sizeable concern at the Autumn Statement.”
Rob Harris, Managing Director of Ramidus Consulting said:
“The practical reality of these findings is that – on the basis of a £12,000 SBRR threshold – a company needing to accommodate more than around 4 staff will be faced with an effective doubling of occupancy costs, because extra space needed to accommodate additional staff will push them over the threshold. With one third of London’s small business in the CAZ, this is likely to be a serious impediment to business growth.”