The Greater London Authority has published its final prospectus for Crossrail Business Rate Supplement (BRS) today: (<http://www.london.gov.uk/crossrail-brs/>).
While more detail can be found in the Mayor’s press release at the end of this item, the key elements of the final plans are outlined below:
BRS 2p multiplier
Additional 4,000 premises exempted
Only around one in six non domestic premises in the capital - and less than 12 per cent across the 20 outer London boroughs - are likely to be liable to pay a BRS contribution. This means that more than 83 per cent of premises in London will not be liable for any BRS at all. The GLA estimates that around 46,500 premises will be liable to pay the Crossrail BRS in 2010-11.
The GLA has taken the decision not to exempt empty properties as a class from the Crossrail BRS, although all those eligible for empty property relief under the National Non-Domestic Rates system will receive the same relief treatment for the Crossrail BRS. This means that empty listed buildings, properties empty for less than three months (or six for industrial properties), and empty properties owned by charities, for example, will normally be exempt from the BRS.
Some categories of ratepayer or business premises, such as charities and certain empty properties (as stated above), will be entitled to full or partial relief on their Crossrail BRS contributions. The same level of reliefs applying to national business rates will also apply to the Crossrail BRS, at the same percentage rate, having regard to the local policies of each of the 33 billing authorities in London.
The GLA has also decided against offering a lower than 2p multiplier or offset against the BRS for ratepayers also paying levies to Business Improvement Districts. BID levypayers will therefore be treated on the same basis as all other ratepayers for the purposes of the Crossrail BRS.
The full final prospectus , as well as an in-depth Q&A section on the Crossrail BRS, can be found using the links below. Individual printed copies of the prospectus will be sent to stakeholders in the week commencing 8 February.
PROSPECTUS HOMEPAGE:
<http://www.london.gov.uk/crossrail-brs>If you have any questions please do not hesitate to contact me.
Martin Mitchell
Budget Development Manager
Strategic Finance
Greater London Authority
Tel: 020 7983 4145
Fax: 020 7983 4241
Email: martin.mitchell@london.gov.uk
COPY OF PRESS RELEASE
Mayor exempts 4,000 businesses from Crossrail business levy
Up to four thousand of London’s smaller businesses will be exempt from the two pence business levy to fund Crossrail, while those areas of the capital set to benefit most from the new rail link will pay a greater share, the Mayor of London announced today.
Whilst over 80 per cent of London’s businesses will pay no supplement at all, rising to almost 90 per cent across the outer boroughs, the capital’s most important new infrastructure project for a generation is essential to deliver a 10 per cent increase in rail capacity. Crossrail will immediately relieve congestion on the network which is expected to increase substantially as London’s population grows over the next two decades.
Therefore the Mayor has today confirmed that the Crossrail Business Rate Supplement (BRS), is to be set at the proposed rate of two pence and is payable from April 2010. The overall Crossrail funding package, of which this forms part, has been supported by the majority of the key business representative bodies in the capital. However, following consultation with London’s businesses, he has raised the threshold at which the BRS must be paid.
It was initially proposed that businesses with a rateable value of over £50,000 would pay the supplement but the Mayor has increased this to over £55,000. This will particularly help London’s small and medium sized firms who represented the majority of the respondents to our initial proposals. Up to 4,000 smaller properties will be exempt from the levy as a result of the change.
The BRS will finance £4.1 billion of the Crossrail project costs. The supplement is expected to continue for between 24-31 years to fund the interest on and repayment of the debt the GLA will take out to finance this. Seventy per cent of the cost will be raised in boroughs which will have a new Crossrail station, so businesses in those areas will therefore pay the largest BRS contributions overall.
Half the cost in the first five years will be met by business ratepayers in Westminster, the City and Canary Wharf. Those in Westminster are estimated to contribute £67 million towards the £219 million expected to be raised annually by the supplement in 2010-11, compared with the projected £60 million that businesses in all 20 outer London boroughs combined are likely to pay. Every London borough is expected to benefit by at least £14 million a year by 2026
The higher threshold will also benefit schools and other not for profit organisations. In Barking and Dagenham, for example, almost one quarter of the properties being made exempt from the BRS by the change are either primary schools, nurseries or children’s centres.
The Mayor of London Boris Johnson said:
‘When Crossrail is completed in around seven years, London will be the best connected city in the world where people will be able to criss-cross the capital at speed and in comfort. This major new addition to the network will deliver huge benefits by supporting business, creating new long-term jobs and making the whole city an even more attractive prospect for overseas investors.
‘However, I understand that in these difficult times the additional business rate will be a greater burden to our smaller businesses, which are the backbone of London’s economy. Our final proposals now set the right balance by exempting a further 4,000 of those firms that initially faced a disproportionate burden to those larger organisations in the centre, the West End and the financial districts that will benefit significantly from Crossrail and should therefore pay the greatest share of the construction costs.’
Colin Stanbridge, Chief Executive of the London Chamber of Commerce and Industry (LCCI) said:
'Crossrail is vital to the future success of the capital but it is important London’s smaller companies are not subject to unnecessary or excessive financial burdens just as we are emerging from the recession. This is a good deal for London’s businesses and we applaud the Mayor for this bold decision which takes into consideration both current economic conditions and the significant rise in rates that London firms will see this year.'
Sue Terpilowski, Chair of the London Policy Unit of the Federation of Small Businesses said:
'The level of business rates is a major issue for small businesses in London and it is good that the Mayor has taken the opportunity to reduce the number of smaller businesses who are eligible to pay it. The FSB and others had urged the Mayor only to raise as much money as he needed from the business community to fund its share of Crossrail. We are pleased that he has listened to us.'
Notes to editors
1. The GLA Group recognises the impact that current economic challenges have on Business Improvement Districts (BIDs), particularly those due for renewal ballots in 2010-2011 and will consequently be offereing them additional support. This includes potential additional LDA funding for the London BIDs programme to support ballots and reballots, dedicated GLA Group officers to support BIDs (not least in accessing other sources of funding), sustainable local delivery schemes and exploring expansion options for the cycle-hire scheme.
2. The Crossrail Business Rates Supplement (BRS) is a supplement to business rates bills which will be used solely to finance £4.1 billion of the Greater London Authority’s contribution towards the £15.9 billion Crossrail Project. It is a key element of the Crossrail funding package which was agreed with the Government in November 2007. Less than one in five properties across London will be liable for the Crossrail BRS – falling to as little as one in twenty in some outer London boroughs.
3. The Mayor’s final policies for the Crossrail BRS are published in a prospectus which can be accessed at: <http://www.london.gov.uk/crossrail-brs> .
4. A draft prospectus was published in July 2009 inviting responses on our initial plans from ratepayers, business representative bodies, London boroughs and other stakeholders. The majority of responses were from small and medium sized businesses expressing concerns about the impact of the BRS on them.
5. Powers were granted to the Greater London Authority (GLA) to introduce the BRS under the Business Rate Supplements Act 2009 (the ‘BRS Act’) which received Royal Assent on 2 July 2009. The GLA will exercise these powers under the direction of the Mayor of London. County councils, unitary authorities and metropolitan districts outside London also have the power to raise a BRS but the GLA is the only authority expected to introduce one this year.
How the Crossrail BRS works
6. The BRS is set at 2p per pound of rateable value. This means that any property with a rateable value above £55,000 (i.e. £55,001 or more) will liable for the BRS at a rate or 2p (or 2%) of its total rateable value – assuming its ratepayer is not eligible for general business rates reliefs.
7. For example a typical ratepayer occupying a property with a rateable value of £100,000 would pay a BRS contribution of £2,000 (i.e. the £100,000 rateable value x 2%) each year. We estimate that just under half of properties likely to pay the supplement will be liable for a BRS of £2,500 or less each year (i.e. less than £50 per week).
8. Some classes of ratepayers could pay less than this or be exempt altogether where they qualify for reliefs under the national business rate system. For example eligible charities and amateur sports clubs will only be required to pay a maximum of 20 per cent of the charge (i.e. no more than 0.4p) and possibly less than that – because as is the case under the national business rate system they will receive at least 80% relief on their bills. Therefore a charity occupying a property with a rateable value of £100,000 would pay a maximum of £400 a year in BRS (or just under £8 per week).
9. Empty properties will not be exempt as a class from the BRS – in the long term landlords who are liable to pay the supplement for empty properties will benefit from Crossrail through potentially higher rental values and occupancy rates. As is the case under NNDR newly empty properties, empty listed buildings and those properties owned by charities will, however, generally be exempt. Ratepayers in Business Improvement Districts will be treated on the same basis as other ratepayers and will therefore be subject to the full 2p rate (subject to any NNDR reliefs they may be eligible for).
10. The BRS will only be payable for properties on the local rating lists of the 32 London boroughs and the Corporation of London – who will collect the BRS on the GLA’s behalf in parallel with national business rates bills. The bills for 2010-11 will be sent out by boroughs before the end of March 2010.
BRS revenues
11. It is estimated that around £219 million a year will be generated from applying a 2p rate on existing properties with a rateable value of over £55,000 based on the new 2010 rating list. This is after allowing for all reliefs, collection costs and an assumed loss of 5% due to non payment of bills and refunds where ratepayers successfully appeal against their new 2010 property valuations.
12. Just under 17 per cent of business premises (or hereditaments)s across London (around 46,500) are estimated to be liable to pay the Crossrail BRS (before reliefs) in 2010-11. This ranges from 35 per cent in Westminster, 30 per cent in Kensington & Chelsea and 28 per cent in the City of London to less than 10 per cent in nine boroughs (Barnet, Bexley, Hackney, Haringey, Harrow, Lewisham, Redbridge, Sutton and Waltham Forest) The number of businesse estimated to be liable to pay the Crossrail BRS (before reliefs) ranges from over 11,700 in Westminster to less than 450 in Harrow, Lewisham, Sutton and Waltham Forest
13. The Crossrail benefits paper issued by CRL in February 2009 highlights that every London borough is projected to benefit by at least £14m per annum by 2026 (at 2008 prices) in terms of jobs created and improved transport times. Indeed one quarter of boroughs will benefiting by over £50m per annum. Even boroughs located furthest geographically from the route such as Barnet (£31m) and Bromley (£29m) are projected to benefit significantly.
14. Overall the wider economic benefits (i.e. job creation) by 2026 are expected to be around at least three times higher annually than the BRS contribution, and the total benefits (new jobs and transport benefits) around six times higher (at 2008 prices). The expected benefits by borough are set out below:
15. Further information on the Crossrail project can be found on the Crossrail website at www.crossrail.co.uk <file://www.crossrail.co.uk>
MEDIA ENQUIRIES:
Press information is available from Richard Brookes and Helen Collier in the Mayor’s Press Office on 020 7983 6550/4020 or by emailing economicdesk@london.gov.uk <mailto:economicdesk@london.gov.uk> (NOT FOR PUBLICATION)GENERAL PUBLIC/NON-MEDIA ENQUIRIES:
Call the Public Liaison Unit at the Greater London Authority on 020 7983 4100Copyright © 2025 · All Rights Reserved · Institute of Revenues Rating and Valuation
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