Heart of London Business Alliance (HOLBA) which represents over 500 businesses in the West End has issued an urgent warning over a looming £2 billion increase in business rates expected next April, which could threaten the survival of businesses across the capital. The business association is urging the Government to replace the outdated business rates model with a fairer and smarter solution.
HOLBA’s analysis shows that business rates for central London could rise by an estimated 26% due to:
- Rateable values increasing by an estimated 5%–20%
- A new Higher Rate Multiplier that could cost London firms an estimated additional £1 billion
- Removal of the £110,000 cap on sector reliefs that could add another £700 million in costs
All of this comes despite London already contributing £9 billion annually in business rates – a third of the national total.
Ros Morgan, chief executive, Heart of London Business Alliance, said: “Businesses in the West End and across London are staring down the barrel of a huge tax hike — with no justification or reform. The current business rate system places disproportionate pressure on physical businesses that drive economic activity and footfall. HOLBA is currently working on a solution to help the Government finally fix this broken system and protect our economic future..”
Ojay McDonald, chief executive, Association of Town and City Management, said: “Business rates desperately need to be modernised. With the growth of digital technology, they simply do not reflect 21st Century economic activity anymore. We have reached a crossroads. This is not just a London problem, but a problem for high streets across the country. While we are delighted that smaller businesses will benefit from a lower multiplier, if the big footfall generators, they are co-located with, must close, because of increased costs, then everybody loses out.”
Neil Dolan, managing director of Little Lion Entertainment, which operates the visitor attraction The Crystal Maze LIVE Experience, said: “Every business should pay its fair share to support vital local services — but the current property-based system is outdated and penalises those investing in and operating from bricks-and-mortar venues in city centres like London’s West End. Reform must reflect the digital age and champion continued investment in our cultural heritage.”
