Businesses in London will pay a 2p Business Rate Supplement from April 2010 to help fund Crossrail, the Greater London Authority (GLA) proposes.
The supplement will apply to business properties with a rateable value of £50,000 or more and is expected to affect one in five of London’s business premises. Some categories of ratepayer such as charities and sports clubs will be entitled to full or partial exemption.
Mayor of London Boris Johnson said: “Despite the economic climate it is essential that we do not allow our investment in the future to falter. We need to take a long view and move ahead with projects that will ensure that we emerge from the downturn in the best possible shape.
“Crossrail is the perfect example − it is essential to the London and UK economy, and will deliver a revitalised transport system capable of meeting demand, new stations, regenerated areas, and thousands of new jobs. Through this levy, larger London businesses will be playing their part in ensuring London a future from which they, and all Londoners, will benefit,” he said.
Large businesses occupying properties with rateable values of £1M or more − which account for less than 3% of London’s property base – are likely to contribute more than one third of the total contribution each year.
The proposals are now under open consultation, and and comments can be made before 22 October 2009, with a final prospectus to be issued by the end of January 2010.
However, the British Retail Consortium has slammed the proposals, saying the supplement will damage economic recovery. Its director general, Stephen Robertson said: “Crossrail is a much needed and long overdue project, but London retailers will pay out far more than they can ever hope to get back.
“Requiring retailers to disproportionately fund Crossrail is wrong at any time, but is especially ill-timed given the current tough trading conditions – especially for non-food retailers.
“London retailers will have to fork out for Crossrail BRS from April 2010 – just as they are hit by a massive revaluation bill. But they’ll only see any benefits by 2017 at the earliest and will continue funding the project until 2036. Retailers already contribute the largest share of business rates and next year’s revaluation is expected to raise London’s business rates by the greatest proportion of any other UK region.
“The GLA mustn’t pay lip service to the Crossrail BRS consultation process. We expect there to be considerable opposition to the funding proposals and will be closely monitoring the GLA’s response,” he said.