London firms to pay 2% Crossrail levy
Boris Johnson has sparked anger among many London SME’s by revealing that they will have to pay a 2% business levy from April to cover the cost of the Crossrail.
Around 80% of SME’s will be exempt from the levy, while commercial properties with a value of £55,000+ will be made to pay the bulk. Many critics have called the levy “ill timed” as many businesses are struggling to recover from the recession. The original proposals for the levy were to charge properties worth £50,000 upwards. The Mayor of London claims raising the value has made around 4,000 businesses exempt.
The Crossrail route, which is proposed to be fully operational by 2017, will run through east and west London. It will link Maidenhead in Berkshire to Shenfield in Essex and will also include a link to Heathrow airport.
Those businesses eligible for the levy will have to pay for 31 years. Around 70% of the total levy will be paid by Central London boroughs, which the Crossrail will ultimately serve.
Canary Wharf, Westminster and the City will pay half the cost of the £4.1 billion levy within the first 5 years.
Vacant buildings are also subject to the levy, which could leave already struggling landlords fighting to keep their heads above the water.
But Boris Johnson is still defending the levy. He said; “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.”