Business rates are expected to undergo a stultifying rise as a result of the renewed evaluations for the premises of London city firms that have just been published. An average increase of 26%-41% is expected for the bulk of the businesses, resulting in a tax boost that is going to hurt many business operators.

The Government has decided to consider the rental values within the time period of April 2003 to April 2008 in deciding the new business rates. This particular decision has been criticized severely, mainly because a significant portion of the time is prior to the economic downturn, when offices to rent London rates were very high.

But the scenario changed dramatically during the recession when the values plummeted, and as the Government is taking the time period prior to the recession under consideration, firms are likely to pay ballooned rates, which may seem unfair under the circumstances.

Merrick Cockell, chairman of London Council has gone on to refer this strategy taken by the Government. as ’short-sighted’.

Chief executive of the British Property Federation Liz Peace has expressed her concern and urged the govt. to be more liberal about the issue.

The worst affect will fall upon the office rental and retail sectors. Such drastic measures taken by the Treasury are bound to bring chaos, and it was no surprise when the official website by the government for business rates, crashed yesterday due to enormous traffic.

However, the Goverment has finally addressed the severity of the issue and has proposed a total of £2 billion alleviation scheme for the struggling firms, which still seems inadequate.

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