Rates rise could be final nail in the coffin for businesses

Phillip Hammond promised eagerly-anticipated relief for Islington’s small businesses in yesterday’s budget announcement. Business rates are set to soar by 56% in some wards, making Islington one of the the hardest hit boroughs in the country.

Hammond announced three measures to alleviate the pain:

          • Businesses losing ‘small business rate relief’ will not see a rise of more than £50 per month

          • 90% of local pubs will get a £1,000 annual discount

          • A £300 million fund will be made available for local authorities to assist business owners

Small businesses in Islington are already under pressure from post-Brexit inflation and rising rents, and despite Hammond’s measures, some owners still feared their increased bills could be the final nail in the coffin.

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Kevin Fisher, of Newgate Gallery in Clerkenwell Road, runs a picture framing business. He described the rises as “outrageous” and said he would be among those who will lose their small business relief.

“My rent has gone up by 40% as well,” Fisher added. Hearing the Budget news that the Government had pledged to limit the increase for businesses like his to £50 a month, he responded: “If that’s true, it’s much more reasonable. That, I can handle.”

Steven Staples, director of Copy Express on Great Sutton Street, also feared the worst. He said he had been “pretty disgusted” when he heard about the proposed increase. The council has since promised to send someone down to negotiate, which has made him more optimistic.

“At the moment I’m not too concerned, but if they go against [our agreement] I’ll be even more cross,” he said.

Staples moved his business to Islington 18 months ago, and says he has “found Islington better to deal with than Camden where I came from. They’ve definitely been more interested in helping out.”

He was unsure how Hammond’s pledge to limit the rates increase for businesses losing small business relief, would affect him.

“I was on the small business rate relief,” he explained, “I think I still will be. I did like that he’s only going to be raising it by £50 a month if you lose it. But you don’t want to lose it because it saves about a grand.”

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Chris Stevenson of Arts and Guilding Materials on Clerkenwell Road was fatalistic about the proposed rates hike.

“In some ways you can’t actually have the money anyway,” he said, “because you either give it to the tax man, or you give it to the council.”

Martin Flynn, landlord of the Royal Oak pub on St John’s Way commented on the promised £1000 discount for pubs.

“You’ll never see the money. You can apply for it but you’ll never see it. They promised the same thing three years ago. What lots of people don’t know is that when the rateable value goes up, Sky Sports goes up by the same amount. BT Sport’s the same. So you’re hit twice.”

The rate of increase, which will begin on 1 April, varies across the borough, effectively amounting to a lottery postcode. In N6 rates are going up by 14%, while in N5, N8 and EC1 the jump is over 50%.

Image: Kevin Fisher, who runs Newgate Gallery in Clerkenwell Road