The Home Office is paying more than £12.5m a year in business rates on its London headquarters, according to Valuation Office Agency (VOA) figures. The Ministry of Defence also earns a place in the capital’s top ten rate payers.
The remaining eight places are dominated by high-end retailers and financial institutions with Harrods’ Knightsbridge paying the second highest bill, closely followed by Citigroup’s tower in Canary Wharf.
Among the banks featuring in the top ten are HSBC, which pays almost £12m annually, and Barclays tower in Canary Wharf, which costs the company £9.62m in business rates. The BBC is paying £11.23m on its Portland Place building.
London’s top ten business rate payers are:
The VOA data showed that Arsenal paid the highest business rates of any London football club, with an annual bill of £3.3m on its Emirates stadium. The Bank of England’s Threadneedle Street home attracts an annual bill of more than £2.5m. And the capital’s most expensive car park is Westfield London in White City, which attracts a bill of just under £1m.
With business rates effectively calculated on a six-year delay, the Government is under pressure to reform the UK’s rating system. The problem is rooted in the fact that business rates are also calculated as a percentage of rents, resulting in companies outside London forced to pay bills based on 2008 valuations even though rents have since fallen dramatically in some areas.
“Any moves to overhaul the business rates system won’t happen quickly, particularly with an election in the way,” commented Debbie Warwick, a partner and head of rating at chartered surveyors Daniel Watney. “Despite West End office rents now nearing £1,000 per square metre, most occupiers will not see any substantial increase in rates until after the 2017 revaluation.”
The Government raises £26bn annually from the tax and controversially decided to delay a revaluation due in 2015 by two years. Last December, Chancellor George Osborne capped the inflation linked rise in rates at two per cent a year and promised the system would be reviewed.
There are some notably exclusions from the list. Because business rates are levied on individual occupiers, expensive new skyscrapers such as the so-called Walkie Talkie and the Cheesegrater — let to multiple occupants — do not feature in the ranking. One reason the Home Office has already started sharing its extensive Marsham Street offices with the Department for Communities and Local Government.
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