Companies Suffer Extra Burden Due to New Government Policy
October 9th, 2009
Many businesses are going to be hit hard by increase in their tax burden. This is going to happen soon as the UK government has chose the rent of properties between the years 2003 to 2008 to be the standard for deciding the offices to let London business rates. This will increase the value of businesses by 26%-41% which will in turn increase taxes.
This standard includes the rent before the recession as well in deciding business rates. The truth of the matter is that the real estate market has suffered a lot during recession and the value has gone down. In such a case, using pre-recession rates for deciding business rates has been criticised badly. This system of calculation puts unfair burden on the businesses are they will be paying taxes according to an earlier value which does not apply any more. Office rental and retail sectors may have to suffer most which has got them worried. Frantic people have been visiting the relevant government website which eventually could not bear the burden of traffic and crashed recently.
Merrick Cockell, chairman of London Council claims that the government has made a mistake in making this policy and has not kept long term issues in mind.
Chief executive of the British Property Federation Liz Peace has also urged the government to help the businesses in improving their condition which this new policy will only be worsening. The government have decided to launch a package of £2 billion for companies who are having difficulties in making both ends meet but it has been claimed to be insufficient by many.
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