Page last updated at 13:20 GMT, Friday, 29 January 2010

London businesses charged 2% Crossrail levy from April


Mr Johnson said small firms would be exempt from the levy

London businesses will have to pay a 2% business rate levy from April to help meet the £16bn cost of Crossrail, London Mayor Boris Johnson has said.

But 80% of small and medium businesses will be exempt from the 2p in the pound supplement, he added.

Commercial premises with a rateable value of more than £55,000 will shoulder the cost of the project.

The mayor hopes to raise £4.1bn for the project. Crossrail's 72-mile route will run through west and east London.

When the 2% levy was proposed, critics called the plan "ill-timed" warning it would harm the recovery of businesses in the capital.

Mr Johnson said raising the rateable threshold from £50,000 to £55,000 will exempt an additional 4,000 businesses, including schools and not-for-profit organisations, from the business rate supplement (BRS).

Those charged will have to pay the BRS for up to 31 years.

Up to 70% of the cost will be borne by businesses in central boroughs - which will be served by Crossrail stations - with outer London boroughs contributing the least.

'Difficult times'

Mr Johnson said: "I understand that in these difficult times the additional business rate will be a greater burden to our smaller businesses.

"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."

Colin Stanbridge, chief executive of the London Chamber of Commerce and Industry, said: "It is important London's smaller companies are not subject to unnecessary or excessive financial burdens just as we are emerging from the recession."

Crossrail will link Maidenhead in Berkshire to Shenfield in Essex, running through central London.

The route, when operational from 2017, will also include a link to Heathrow airport.

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