Monday, Nov 23, 2009

London, pay up.

London Evening Standard: Property boom lands firms with £1.9bn rates bombshell

"London firms are to be hit with a £1.9billion increase in business rates over five years.."

Posted by rumble @ 07:59 PM (3701 views)
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4 Comments

1. mander said...

Aha, and capital gains tax stays at 18%

Monday, November 23, 2009 09:17PM Report Comment
 

2. mark wadsworth said...

Business Rates, being the closest thing we have to Land Value Tax, are the least bad tax we have by a country mile.

Sure, I have lots of minor quibbles with BR (i.e. they should exempt the buildings rent element and increase the tax on the site rental value; and they should do revaluations every year), but in the grander scheme of things, landlords will just have to drop their rents a bit, and owner-occupier businesses will have to decide whether they want to continue subsidising their trading losses with their property income or whether they want to shut up shop and let their premises to a more profitable business instead.

But those are all good things, not bad things. As opposed to other property-related taxes like Stamp Duty or capital gains tax, which are awful, for example.

Monday, November 23, 2009 10:10PM Report Comment
 

3. drewster said...

Business rates are a bit like land value tax. They force out uneconomic companies and free up valuable space for more efficient businesses. Obviously it's the existing companies that complain loudest - but it's still a relatively efficient form of tax.

According to the following article, the overall changes to business rates will be revenue-neutral. It's just a matter of revaluations, not raising rates: -
WebNewsWire: Government confirms majority of business rate bills will fall
"The Government will not collect a penny more of extra revenue as a result of the 2010 revaluation. Regular revaluations ensure the rate each business pays is fair and reflects changes in the relative value of property over time."

Monday, November 23, 2009 10:16PM Report Comment
 

4. drewster said...

Official government news release here, with stats:

Central Office of Information: News Distribution Service: Government confirms majority of business rate bills will fall
"All regions could see average rate bills fall or stay the same as a result of revaluation and transitional arrangements, expect London and the South West, which could on average see respective increases of 3 per cent and 1 per cent after transitional relief. London has seen the highest economic growth of any region, has the highest concentration of businesses, and makes a proportionate contribution through business rates."

So there you have it - London had the highest growth (something we can all agree on), so it pays more tax. Simples.

Monday, November 23, 2009 10:23PM Report Comment
 

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