City of London business rates projected to increase by £1.4bn as Brexit looms

Companies such as Goldman Sachs, Nomura, Bank of America Merrill Lynch and the Bank of England are expecting to be hardest hit by the increases

Many of the UK’s biggest financial service companies are already grappling with intense uncertainty in the wake of last year’s Brexit vote (Getty)

A projected increase in business rates faced by those occupying offices within London’s Square Mile could hamper the City’s bid to remain a banking hotspot after Brexit.

According to data from property agent CVS, the business rates bill for offices in the City of London is set to increase by £1.37bn, or more than a third, within the next five years.

Business rates – which are sometimes referred to as non-domestic rates – are levies that companies occupying commercial properties pay. That tax goes towards covering the cost of services provided by local authorities and the emergency services.

Offices in the City currently pay £888m in rates between them annually.

The additional cost will be footed by the banks, insurers, asset managers and law firms that occupy the buildings, with companies such as Goldman Sachs, Nomura, Bank of America Merrill Lynch and the Bank of England expecting to be hardest hit, according to CVS.

Many of the UK’s biggest financial service companies are already grappling with intense uncertainty in the wake of last year’s Brexit vote and some have already said that they are evaluating relocating jobs or parts of their operations abroad.

The prospect of counting costs could also heap pressure on the Government to make changes to the business rates system in next month’s Budget.

Brussels-based research group Bruegel earlier this month warned that global banks might have to relocate €1.8 trillion (£1.53 trillion) of assets from London to the continent after Brexit, putting as many as 30,000 UK jobs at risk.

The assets which the think tank said would be affected represent 17 per cent of the entire UK banking system.