The government, the mayor of London, Tower Hamlets council and JPMorganChase are fine-tuning a business rates incentive package to ensure the US investment banking giant proceeds with plans for a £3 billion campus at Canary Wharf.
In November, the American bank announced plans to build a 3 million-square-foot headquarters tower at the Riverside site in Canary Wharf in London. The announcement was a shot in the arm for the UK economy the day after the Chancellor unveiled the government's Budget.
In a statement then, JPMorganChase said the project would "enable additional capacity for the firm to grow by creating a world-class workplace for up to 12,000 employees, further strengthening London’s position as a global financial hub".
It added that the plans were subject to a "continuing positive business environment in the UK and the receipt of the necessary approvals and agreements at a national and local level".
It would be the firm’s principal headquarters in the UK and its most significant presence in Europe, Middle East and Asia, on a site in Canary Wharf that it bought in 2008 and where it has long been linked to a massive tower development.
Business rates are the principal tax on commercial property in the UK. They are based on a "rateable value" set by the Valuation Office Agency, a government body that works out rates by multiplying the rateable value with a government-set multiplier. The government can choose to offer relief for smaller businesses or struggling sectors, as with the hospitality sector during the pandemic.
At a Tower Hamlets meeting tomorrow (27 March), the Cabinet will be asked to agree, in principle, to offering a business rates relief package as part of a forthcoming Memorandum of Understanding.
The bank, the strategic authority for London, the Greater London Authority and the Ministry of Housing, Communities & Local Government have set a deadline of the end of March 2026 for signing. The MOU would be subject to detailed work on "subsidy control compliance, Enterprise Zone and any other legal matters".
Tower Hamlets says the opportunity, ultimately, could enable the Borough to use significant additional business rates funding for local priorities. Its early modelling suggests that this could represent a £1 billion to £1.6 billion return over a 25-year period.
The meeting papers say the UK government has engaged with Tower Hamlets, the GLA and the bank on whether a business rates incentive mechanism – potentially via an Enterprise Zone or another structure – could enable the development to proceed. It says the government has indicated that JPMorgan is "unlikely to progress without clarity and certainty on business rates liabilities".
The council is working with the government, the GLA and the VOA to support due diligence, modelling and governance on any incentive while ensuring compliance with subsidy control, legal duties and the council’s financial sustainability objectives.
Tower Hamlets planning officers say there is "urgency" in agreeing the MOU by end of March 2026 because JPMorgan’s board and stakeholders want certainty as they proceed with detailed design and contractor procurement. The MOU would be a "signal of the council/GLA/government’s intent to support, ahead of finalising binding legal agreements closer to the construction start".
There are two options being considered.
The first is to create an Enterprise Zone which allows for an up to 100% business rates discount for qualifying occupiers, and retains full business rates growth locally for 25 years.
The second is Local Discretionary Relief or a Business Rates Retention Scheme. Under these plans the council absorbs 30% of the cost, the GLA 37%, and the government 33%. The council says this represents a substantial financial risk and could reduce long‑term core income.
The council would pay a levy of 10% for any growth above baseline to Ministry of Housing.
In the Cabinet papers, Tower Hamlets' chief financial officer said: "The final impact on the Council’s Medium Term Financial Strategy will depend on the design of the incentive mechanism, the rateable value confirmed by the Valuation Office Agency, and the approach agreed between Government, the GLA and the Council."
John Webber, head of rating at Colliers, said: "The EZ state subsidy rules would normally limit the relief to £275,000 over 5 years which would seem minimal given the scale of the development. If the relief is beyond that then it would give rise to challenges as to why JPMorgan was being subsidised.
"The point is the fact that business rates – both the certainty and the quantum - are a deal breaker on a scheme as large as this and shows what a mess the business rates system is in."
Alex Probyn, Practice Leader for Europe and Asia-Pacific Property Tax at global tax firm Ryan, reflecting on how the main office districts in London are treated under the revaluation, said: “Across the seven principal Central London office districts, an 11.9 per cent rise in rateable value under the 2026 revaluation for 37,888 offices generates £607.9 million of additional rateable value to £5.72 billion overall.
“Even after lower multipliers and transitional relief, that still results in a £78.7 million increase in business rates liabilities for 2026/27 to £3.01 billion once supplements are taken into account.”