Property firms have issued a warning that a potential £1bn increase in business rates for London offices, reportedly under consideration by Chancellor John Healey, would constitute an "attack on growth" and deliver a substantial blow to the City. The Chancellor is said to be weighing up an increase to business rates for expensive office blocks and skyscrapers, which could generate £1bn for the Treasury.
This proposed policy, reported by the Telegraph, would disproportionately affect the capital's business districts. It would apply to commercial buildings with a value exceeding £500,000, while exempting larger retail and hospitality premises to exclude the high street from the hike.
According to tax firm Ryan, this measure could impact approximately 9,000 properties in London and the South East, with Canary Wharf and the Square Mile expected to be heavily affected. The boss of the City Property Association, representing over 100 major property developers, stated that such a policy would likely lead to "less investment, fewer jobs and lower tax revenues for the whole country."
A Treasury spokesperson stated that decisions on tax are a matter for the Chancellor to announce at fiscal events, rather than commenting on rumour or speculation.