“Unfair” business rate hikes could force out small enterprises, Hackney traders say.
Following reassessments by central government, Hackney rates are set to be hit with an average increase of 46 per cent — the second highest in the country — says the local council.
Local traders now fear that this will hit small businesses particularly hard, leading to an exodus from the area.
A council-led petition calling for protection for small businesses from any rate increase, which reportedly attracted over 10,000 signatures, was handed into Parliament on Tuesday.
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Business rates are effectively the commercial form of council tax, and the amount an organisation pays depends on the estimated value of the property it occupies. This means high street stores in prime locations are set to pay comparatively more than online retailers such as Amazon when the rates come into effect in April.
Giuseppe Deriu, manager of Eat 17 on Brooksby’s Walk, expressed his concern that “big business will begin to take over” as costs become prohibitive for smaller start-ups.”
Alistair Skitt of Hatch cafe on MacKintosh Lane slammed the hikes as “crazy” and “unfair”.
“I came to Homerton in 2014 because it was affordable but even since then it has become untenable. You could see a string of small businesses having to close down.”
Amid widespread criticism over the punitive measures, Theresa May has ordered a review and assured MPs there would be “appropriate relief” for companies hardest hit by the changes.
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However, Hackney traders are still concerned.
Jolanta Kaczmarek, who runs the Polski Sklep on Homerton High Street, said: “It will be very difficult for local businesses to carry on. I pay £828 per month in business rates in Hackney but for my shop in Waltham Forest it is £150 per year. Hackney has become trendy and they [the government] know they can get more money.”
The East End Trades Guild, which was formed in 2012 to protect the interests of small businesses in east London, told the Hackney Post: “The costs for small enterprises are so great that we are losing essential and viable trade from London, which has repercussions on whole communities.”
Homerton councillor and cabinet member for regeneration Guy Nicholson said that the rises would have “catastrophic consequences for the future of the Hackney economy.”
In a letter to chancellor Philip Hammond, Nicholson called on the government to “rethink its planned increase to business rates”, warning that it could cause “thriving business communities” to “slide into stagnation.”
Hammond is facing strong calls to reform business rates in Wednesday’s budget but the Treasury has insisted three-quarters of businesses in the UK will see either no change or a fall in their rates.
An earlier version of this story appeared in the Hackney Post’s print version on 18 October 2016.
(Top image credit: Foreign and Commonwealth Office/Flickr via Creative Commons licence)