The Selfridges and John Lewis stores on Oxford Street will be among the hardest hit retailers in London’s West End when the latest business rates hike takes effect in April.
Nearly 8,000 properties across London’s West End will be hit by a total £45m increase in business rates in April, a report by real estate adviser Altus Group indicates.
The rates bill for Selfridges’ Oxford Street store will increase to £17.41m – up 59% since 2016/17.
John Lewis will also experience a 59% increase from 2016/17 for its Oxford Street store – it will rise to £10.43m.
Rates for the Oxford Street branch of Debenhams, which announced a £40m cash injection this morning, will increase to £5.43m in 2019 – again, a 59% increase since the last revaluation in 2016/17.
West End premises paid £1bn in business rates during the 2016/17 tax year and the report predicts that in 2019/20 this will rise to £1.36bn. This represents a third-year cumulative tax rise of £359.9m since the most recent revaluation in 2017, and is £45.4m higher than the current financial year.
Business rates help, announced in the autumn Budget in October, will cut rates by one-third for businesses with a rateable value of less than £51,000 from April. However, it offers little help to larger retailers, including those in London’s West End.
A fresh inquiry into business rates was launched by the Treasury Select committee earlier this month to assess how government policy has affected the UK high street. However, retailers questioned how much aid this will offer bigger businesses.
Head of UK business at Altus Group Robert Hayton said: “Rents paid determine rates and, at the assessment date for the 2017 revaluation, demand for space was strong and record rents were being set, resulting in very large increases in rates compared with the previous assessment date seven years earlier.
“A premium is often paid by a small number of luxury retailers in order to have a presence – even when loss making of itself – in the West End. There are independents forced to pay equally high rents to get into an effective retail clique – many of which find they cannot then support the burden of high rates those rents lead to.”
The biggest West End business rate increases
|Store||Rates Payable 2016/17||Rates Payable 2019/20||3rd Year Change (£)||3rd Year Change (%)|
|Selfridges 398-454, Oxford Street||£10,929,380||£17,407,280||£6,477,900||59.27%|
|John Lewis 278-306, Oxford Street||£6,555,560||£10,432,840||£3,877,280||59.14%|
|Louis Vuitton 17-20, New Bond Street||£2,005,960||£4,427,800||£2,421,840||120.73%|
|Debenhams 334-338, Oxford Street||£3,407,030||£5,433,880||£2,026,850||59.49%|
|Ralph Lauren 1-5 New Bond Street||£2,083,510||£4,050,520||£1,967,010||94.41%|
|Chanel 158-159, New Bond Street||£1,633,720||£3,458,400||£1,824,680||111.69%|
|Marks & Spencer 456-472, Oxford Street||£2,993,430||£4,820,800||£1,827,370||61.05%|
|House of Fraser 308-332, Oxford Street||£2,931,390||£4,721,240||£1,789,850||61.06%|
|Burberry 21-23, New Bond Street||£935,770||£2,661,920||£1,726,150||184.46%|
|Christian Dior 160-162, New Bond Street||£1,106,380||£2,766,720||£1,660,340||150.07%|
|Primark 14-24, Oxford Street||£1,509,640||£3,065,400||£1,555,760||103.06%|
|Primark 499-517, Oxford Street||£1,825,010||£3,327,400||£1,502,390||82.32%|
|Topshop 214-218 Oxford Street||£2,347,180||£3,835,680||£1,488,500||63.42%|
|Forever 21 360-366, Oxford Street||£1,969,770||£3,364,080||£1,394,310||70.79%|
|Victoria’s Secret 111-117, New Bond Street||£1,473,450||£2,845,320||£1,371,870||93.11%|
|Marks & Spencer 169-173, Oxford Street||£2,145,550||£3,500,320||£1,354,770||63.14%|
|Nike 230-236, Oxford Street||£1,432,090||£2,703,840||£1,271,750||88.80%|
Source: Altus Group