London business rates set to soar after revaluation
London businesses face forking out almost £1 billion more in business rates as the Government unveiled the results of a major review.
New, up-to-date valuations of premises across the country will see London rates soar by an average of 11%, an overall increase of £885 million on this year.
Every other region will see their business rates reduce, with ministers insisting the latest revision is a fairer deal for the majority of Britain's companies.
The Government will also fund transitional arrangements for those companies set to bear the brunt of the change.
Overall, around a quarter of businesses will see their bills increase. The revaluation will take effect from April.
Local government minister Marcus Jones said: "This Government is cutting business rates.
"Yet local firms also need to be confident that the rates they pay are accurate and fair, no matter where they are in the country, and these updates will give them that reassurance.
"We are committed to helping all businesses flourish and as we make the system fairer up and down the country, nearly three quarters of companies will see no change, or even a fall, in their bills - including 600,000 who from next April will have their bills cut altogether.
"But for the small minority of businesses that do face an increase, we're putting in place £3.4 billion of transitional relief to provide vital support as they adjust to these fair and impartial changes."
For those businesses that face an increase in their bills, any rise will be capped at 5% in the first year for small properties.
Those businesses facing an increase will have their bills subsidised initially from a transitional fund worth £3.4 billion, and will mean increases in business rates bills will be phased in over the next five years.
London will benefit more than anywhere else in the country from the transitional relief scheme.
In total, properties in London will benefit from almost £1 billion over the life of the scheme.
More than 140,000 properties in London will benefit from the fund, of which more than 100,000 are small properties.
The London Chamber of Commerce and Industry (LCCI) had previously warned against treating the capital as a "cash cow".
Rob Griggs, head of public affairs at the LCCI, said: "We will be looking carefully at the wider implications of the revaluation and consulting with our members in the days and weeks to come.
"Our primary concern is that London businesses are not hit by any unintended consequences, including having to cut back on training or being forced to move out of the capital."
Cuts in business rates range from 2% in the South East to 11% in the North East.
However, businesses will not benefit from these reductions immediately.
The cuts to bills will be phased in, in order to fund the transitional arrangements.
The precise method of how this will work is still being consulted on by the Department for Communities and Local Government. The consultation runs until October 26.
These measures are on top of wider reforms to business rates, which will mean that by 2020 councils will be able to keep 100% of all locally raised taxes.