London’s biggest business rates bills revealed
Sign up to myFT Daily Digest to be the first to know about Barclays PLC news.
The Home Office has been revealed to have the highest business rates bill in London, paying more than £12.5m a year on its Westminster headquarters and topping a list dominated by banks and luxury retailers.
Harrods’ flagship store in Knightsbridge has the second highest bill, followed by Citigroup’s tower in Canary Wharf, with both paying more than £12m a year, according to Valuation Office Agency data.
Four other banks, including the HSBC and Barclays towers in Canary Wharf, also feature in the top 10, alongside the BBC’s headquarters in Portland Place, Selfridges store on Oxford Street and the Ministry of Defence headquarters on Whitehall. All attract annual rates bills of more than £9m.
Politicians are under pressure to reform the UK’s business rates system, which calculates bills with a six-year delay, and has been criticised for charging high street shops more than online retailers.
Calculated as a percentage of rents, businesses outside the capital are stuck paying bills based on 2008 valuations even though rents have since fallen sharply in many areas. Similarly, recent rent increases in the capital are not yet reflected, protecting London businesses from even higher bills.
“Any moves to overhaul the business rates system won’t happen quickly, particularly with an election in the way,” said Debbie Warwick, partner and head of rating at Daniel Watney, the property consultancy that compiled the research.
The government raises £26bn annually from the tax, which has very low collection costs, and controversially decided to delay a revaluation due in 2015 by two years. Last December, chancellor George Osborne capped the inflation linked rise in rates at 2 per cent a year and promised the system would be reviewed. This is due to report interim findings by the end of the year.
“Despite West End office rents now nearing £1,000 per square metre, most occupiers will not see any substantial increase in rates until after the 2017 revaluation,” Ms Warwick added.
The commercial properties included in the top 10 attract such high rateable values due to their size, quality and location in prime areas of central London. As bills are levied on individual occupiers, expensive new skyscrapers such as the so-called Walkie Talkie and the Cheesegrater do not feature in the ranking as they are let to multiple occupants.
In a bid to cut its record occupancy costs, the Home Office is already sharing its extensive Marsham Street offices with the Department for Communities and Local Government.
The research found that Arsenal paid the highest business rates of any London football club, with an annual bill of £3.3m on its Emirates stadium. The Bank of England’s Threadneedle Street home attracts an annual bill of more than £2.5m, and London’s most expensive car park was named as Westfield London in White City, which attracts a bill of just under £1m.
London’s biggest business rates bills
Source: Daniel Watney / Valuation Office Agency
Get alerts on Barclays PLC when a new story is published