Property values in London (especially closer to the centre) have for years been increasing faster than the rest of the country. This means that a revaluation of Business Rates will results in higher bills in Hammersmith and Fulham – while bills will fall in, for example, Yorkshire and the north east of England.
We don’t yet know what the transitional arrangements will be. It is expected the changes will be phased in over a number of years. Nor do we yet know the impact on council finances. Initially the money is likely to be redistributed among councils so there won’t be much impact. However it is likely in the coming years Hammersmith and Fulham Council will be able to keep a growing share of Business Rates revenue.
Hitesh Jolapara, the Council’s Finance Director tells me:
“Initial figures from the Valuation Office show a 36% increase in rateable values for Hammersmith and Fulham. The increase is not uniform. It will vary according to different property types, such as commercial or retail, and location and by rateable values The government are consulting on transitional arrangements that cap the level of increase in any one year. It is also not yet known what the change will be in the business rates multiplier (the rates payable is based on the rateable value x the business rates multiplier). The unknown but potential impact on the Council finances is likely to be an increase in appeals. From a finance perspective detailed work is now in progress to determine the impact on businesses, on the council as a ratepayer and schools.”
A big increase in Business Rates threatens to drive more shops and pubs out of business. The Council could already use its discretion to cut this burden on small firms. But so far has refused to do so. It will be quite wrong, and in the long run self defeating, for the Council to allow itself a revenue windfall of increased revenue from Business Rates but with more and more shop fronts boarded up along our high streets.