TaxPersonal TaxBusiness rate ‘top up’ may be scrapped

Business rate 'top up' may be scrapped

The government is believed to be considering backing down on proposals to allow local authorities to levy a supplementary business rate.

The plan, revealed in last year’s green paper on local government financing, would allow councils to levy local taxes of up to 5% of the national uniform business rate.

Instead, it has been reported that the Department of Environment, Transport and the Regions, is considering the introduction of small business improvement districts, allowing businesses to decide with local authorities on whether local taxation is justified.

The change would mean that local taxation would be limited to funding specific economic regeneration projects that would only go ahead if businesses based in the BIDs agreed.

A spokesperson for the DETR said: ‘Responses to the green paper showed a lot of support for a local top-up to business rates to fund initiatives important to business, but also showed a concern that the proposed decision making process was too cumbersome. We now need to work with business and local government to see a way forward.’

Final proposals are expected to be published in a white paper later this year.It had been feared that original proposals would have cost local business more than Pounds 1bn and would lead to companies withdrawing millions of pounds in voluntary contributions to regeneration schemes.

Links

DETR online

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