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News Release

London

Jones Lang LaSalle comment - business rates


London, 1st April 2009 – The Chancellor announced yesterday a new scheme to allow businesses to defer a proportion of the 2009-10 business rate increases and pay it over the following two years.

Legislation will be passed by the end of July, which will mean that 40% of this year's increase will be paid in 2009-10 with the remaining 60% to be paid half each in 2010-11 and 2011-12.

The increases taken into account will include the 5% rate of inflation rise together with any increase from the transitional relief scheme, which also came to an end in 2009-10.

The Government will require local authorities to send a flyer to all businesses who will apply for the deferment once the legislation is in place. Until the new legislation is passed current installments must be paid as already billed. If by the time the new legislation is passed the whole bill has been paid there will be no opportunity to claim a refund. 

This is a not a reduction in the 2009-10 liability, but an option allowing companies to defer payment. Even though the Government will reimburse local councils the costs in doing this businesses will have to bear the cost of administering the scheme themselves, which could be particularly onerous of companies with large property portfolios.

Mark Radford director in Jones Lang LaSalle’s Rating team said; “The new payment rules will not take effect until July and businesses will need to approach their local council directly to qualify. Any attempts to help businesses in the current economic conditions are welcome, but the proposals seem unnecessarily complicated and simply restricting increased bills to the current annual inflation rate would have been easier and more effective."