The UK government reevaluated the rates system in September 2016 for the first time in five years, leading to predictions that the new rates that all businesses will be forced to fay could jeopardize their future operations. Thousands of companies across London will be forced to pay an extra US$ 4.9 billion in tax to the government in April 2017.
"It's a windfall tax," Brett Wolstencroft, manager at Daunt Books told Sputnik.
"We're not banks, we're retailers, and there isn't the margin to cover this."
Daunt Books has been on Marylebone High Street for 26 years and is one a number of businesses facing a 100 percent rise in business rates.
"Landlords maybe making extraordinary profits but the retailers aren't and the rates hit the retailers," Mr. Wolstencroft said.
Daunt Books #London #Chelsea #SloaneAvenue #Hammersmith pic.twitter.com/ya2IOJbtml
— ロンドンすきやき (@Sukiyaki_London) October 12, 2016
'Objectionable'
It's predicted that the West End and City districts of London will shoulder the biggest increases, with rates going up five times by 2020.
"Unprecedented rent rises in this particular part of London has already changed the profile of the people who live here. The streets have become very high-end shopping destinations rather than being a more 'village style' shopping street. This doesn't result in increased footfall — which doesn't help pay for the extraordinary rise in rents and rates," Mr. Wolstencroft said.
With exasperation, Mr. Wolstencroft agreed that landlords "want to maximize their profits," yet he suggests that: "This is a windfall tax and that is an objectionable tax for any business."
"Frankly, if you're a homeowner, your council tax reflects services. Business rates don't reflect anything, they're a windfall tax. It's not related to services other than the extraordinary flood into London for property. The government is threatening the diversity of the high street and jeopardizing businesses which have existed here for a long time."
'Anti-Business'
Rajesh Agrawal, deputy mayor for business in London, recently wrote an article for London newspaper Evening Standard, in which he claimed the government's rate increase was:
"A kick in the teeth for tens of thousands of companies still coming to terms with the summer's events."
You never know your luck in a big city! pic.twitter.com/1TqXRW6wgR
— Rajesh Agrawal (@RajeshAgrawalUK) October 8, 2016
By "the summer's event's," Mr. Agrawal meant Brexit and described the hike as "anti-London," as well as "anti-business."
Every other region in the UK will see its business rates reduced. "Hitting London with a business rates rise and hankering for 'hard Brexit' sends out entirely the wrong message at this crucial time," Mr. Agrawal added.
Many business experts want that the increase in rates could spell the end for small independent shops and restaurants. "We're not as vulnerable as some business as we do have other shops — but it's a great shame that some high streets like this will disappear," Mr. Wolstencroft insisted.
@PickardJE Business rate revaluation = a retail tax rise with much bigger bills for London shops http://t.co/mueJsUFn #postponerevaluation
— DCLG (@CommunitiesUK) January 25, 2013
"If you are a genuine independent retailer still existing with just one shop, you would frankly find it impossible to pay that combination of rents and rates," Mr. Wolstencroft told Sputnik.
"We are a book shop; we cannot make more money from books just because property prices have increased ten times as much."
The neighborhoods predicted to be hit the hardest include Brixton and Marylebone, according to property adviser Colliers International.
@gregclarkmp disgusting decision to revalue London business rates. Bye small businesses hello chains. London losing its soul. #ratesdebate
— James Steel (@steelmondo) October 10, 2016
