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London businesses to be hit with 2% levy for Crossrail development

Boris Johnson, the Mayor of London, has today confirmed that London businesses will pay a levy of 2% from April 2010 to assist with the cost of the £16 billion Crossrail development. However, commercial premises with a rateable value of less than £55,000 will be exempt from the levy taking out around 80% of small and medium-sized businesses in the area.

It is thought that the two pence in the pound levy will raise around £4.1 billion to support the project which will be beneficial to the whole London area and the business arena. The business rate levy will be in place for 31 years although it has been structured in such a way so that 70% of the cost is covered by businesses in the central area of London, those which would benefit most from the new rail operation.

While many people have criticised Boris Johnson for introducing this business rate levy in the midst of a recession it perfectly illustrates how the city of London is in many ways self financing and a totally different economy to that of the rest of the UK. The adjustment which saw the £50,000 cut-off point increased to £55,000 has apparently taken a further 4,000 companies out of the levy payment system.

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