Islington firms fury at Labour business tax hike

2.43.34pm GMT Mon 16th Nov 2009

Protesting against the Government's business tax hike

Shops, restaurants and other businesses in Islington could see their business rates almost double under new Government plans warn Islington Liberal Democrats.

Business rates for some firms in the borough are likely to rise by up to 50 per cent - a business tax bombshell costing around £120million extra each year. Liberal Democrats fear that the tax hike in the middle of a recession could force local firms to make redundancies or even close down.

Business rates are re-valued every five years but the amount local businesses pay is set at a time two years before they take effect. The new business rates are based on rents in April 2008 when property prices were at their peak before the recession hit.

Liberal Democrats estimate that the average bill across Islington will rise by 35 per cent with businesses in parts of the borough closest to central London whacked the hardest. Businesses in the Angel area can expect to see their bills spiral by up to 50%.

With the current black hole in the Government's finances Labour politicians seem likely to claim that businesses in places like Islington can afford to pick up the tab. Islington already collects £345million in rates each year.

Islington's Liberal Democrat Executive Member for Business, councillor Lucy Watt, said:

"This could be the final nail in the coffin for many Islington businesses. Local firms already cough up £345 million every year that goes straight into the Labour government's coffers and not the local economy.

"Now Labour wants Islington businesses to find an extra £120 million in the middle of a recession. All this does is punish successful firms and Labour's move threatens to undermine any fragile economic recovery in Islington.

"The Labour government must come up with a solution to cushion this hammer blow and stop local businesses from going under when they are already struggling."

Chair of North Essex Road Traders, Saro Castagna, said:

"The last thing local businesses need is an even bigger tax bill from the Government. We are in the middle of a recession and the Government should be helping businesses, not putting their finances under even more pressure.

"This increase could push some small businesses over the edge and force them to lay off staff or go under. The Government has given no vote, no help and no money."