London and the South West in line for business rate hike

Printers could be left facing a business rate increase of up to 3% after transitional relief from April 2010, according to a Department of Communities and Local Government (DCLG) report into changes in business rate liability.

The anticipated changes, which are a result of the 2010 rating revaluation, include a 3% increase for London and a 1% increase for the South West, although the majority of businesses (60%) are expected to see their rate bills fall or stay the same as a result of the revaluation and the relief scheme.

Tim Beattie, head of rating at Jones Lang LaSalle, said: "DCLG's findings suggest that there will be increased rate bills for many businesses in London and the South West, or those occupying properties in prime locations.

"While these large increases in rate liability will be cushioned by transitional relief there are real concerns that the proposed limits do not go far enough in the current economic climate and state of the property market."  

According to the DCLG, the manufacturing sector as a whole "could see falls of 3% or £175m", while its proposed relief scheme to help around 500,000 businesses facing rate increases is expected to top £2bn.

Draft rating lists will be published at the end of September 2009.

Meanwhile, the government's proposed business rates deferral scheme, which is due to come into force on 31 July 2009, will allow businesses in England who opt-in to the scheme to defer 60% of the annual increase in their 2009/10 rates bill, to be repaid equally in 2010/11 and 2011/12.

The government expects the rates deferral scheme to be £650m in deficit in 2009/10, £350m down in 2010/11 and to ultimately cost the Exchequer £80m at the end of 2011/12 due to bad debt and the impact of devaluation on the value of money repaid by businesses.

 

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