The new government policy of deciding business rates states that the value of real estate between April 2003 and April 2008 will be considered for this purpose. A large part of this duration is the period before recession when the value of real estate in London and West End was high (click for offices to let London info). With real estate bearing the brunt of recession, it is not the same. Thus while there will be approximately 25% to 40% increase in business rates, it will not show the actual value of the property which will be much lower that the one calculated by this process.

As a result, companies, which are struggling currently, will have to pay taxes at a rate much higher than their actual value. This decision has been not only criticised but has also scared companies. Many prominent people like chairman of London Council Merrick Cockell has claimed that the government has been thinking about only short term gains while making this policy.

Considering the current state of market, Liz Peace, Chief executive of the British Property Federation has also requested the government to not take this approach but to do something to help these companies. The government replied to this by providing a 2 billion package to help troubled companies. However, it does not seem to have alleviated the fears, especially in office rental and retail sectors which are going to bear the maximum of the burden.

Bewildered business owners have been looking for information everywhere. This decision has created so much panic that due to excess traffic, the government website which gives information regarding business rates also crashed.

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