London’s private business firms, especially the minor ones like small office users, and retailers, are going to suffer a major blow financially. The recent decision of the Treasury to impose high tax rates on the firms is severely ill-judged, and going to cause a lot of hardship.
The renewed tax rates, which are going to be activated from April 2010, are based on the rental rates in the time frame of April 2003 to April 2008.
This time frame chosen for setting up the new rates is prior to the economic downturn, when rental values were at their peak. But there has been a sudden twist in the plot, and a quick turnaround of events, when the recession hit the scene, and rental rates slumped dramatically.
The flawed formula set by the Treasury took no time to create chaos and raise protests, and the Government has responded by offering a relief scheme worth £2 billion for the small office owners and retailers. But the ugly truth remains, that a majority of the companies are still going to suffer a hefty blow.
Demise is looming over many businesses, and strong preventive measures are badly needed to assist many company’s out of their troubles, not burdening them with more expenses.
Some companies will not be able to withstand their office letting or ownership suffering an additional tax hike, which may be the final push over the edge for many office bound, or shop bound, companies.