A host of retail, hospitality and leisure properties in London could be faced with an extra £575.55m in business rates next year as they are not eligible for support measures outlined by the chancellor.
Last week, Jeremy Hunt rolled out a £4.3bn business rates relief package that included an extension of the 75 per cent rate relief schemes for another year. This will only be accessible to 230,000 retail, hospitality and leisure (RHL) properties in England.
At the time, the chancellor said he was “backing the high streets” and would save the average pub £12,869 in business rates next April.
But some 61,650 non-domestic properties in London which have a rateable value of more than £51k — the cutoff point for the rates relief — will see their business rates bills rise 6.7 per cent next April in line with September’s rate of inflation, data from Altus Group has warned.
The firm said that designer department stores Selfridges will be lumped with an extra £576k to pay on rates relief next year and rival Harrods will have to fork out a staggering £617k.
Tim Attridge, head of rating at CBRE UK said that the decision by Hunt to not extend the support to larger properties will have a “detrimental impact” on the retail market.
He explained: “The lack of support for these businesses is both surprising and hugely disappointing. Business Rates continue to have a material impact on retailers as they try to rebuild following the pandemic, something publicly expressed by many in recent months.”
“Whilst other costs continue to rise, and footfall in city centres continues to be suppressed, the lack of intervention will have a detrimental impact on the retail market and stifle store growth strategies, as well as fuelling a potential increase of business casualties in the face of these rising costs.”
It comes as London’s retail and hospitality sector is continuing to pick up the pieces from the fallout of the pandemic and subsequent cost of living crisis.
Kate Nicholls, chief of UKHospitality, said that the standard multiplier rising by 6.4 per cent will see businesses representing almost two-thirds of the sector’s trade still facing a £150m rate hike.
She said: “This will only put more pressure on consumer prices and inflation, at a time when businesses are still grappling with high costs of energy, food, drink and wages.”
City A.M. has contacted the Treasury for a comment.