TaxPersonal TaxOpposition to local business levy grows

Opposition to local business levy grows

A government proposal to give local councils the right to levy an additional tax on regional businesses is meeting with increasing opposition from UK business groups.

The anti-supplementary rate lobby has, according to the Financial Timescontinued to grow since the government published its Modernising Local Government Finance green paper.

Yesterday, members of the Bristol Chamber of Commerce, the UK’s largest chamber of commerce organisation, suggested the body field candidates in the 2001 local elections to oppose the paper, if the government pursued the plan.

The green paper would allow local authorities to raise the business tax rate from 1% in year one to a maximum of 5% in year five.

Nigel Sherlock, the Bristol president said the act would ‘tip the scales’ in the case of certain marginal businesses.

The British Chamber of Commerce has estimated this supplementary proposal could cost businesses an additional £2.7bn in the next five years and £1bn each year thereafter.

The BCC believes local authorities should first win approval for their plans from the business community and only then be allowed to levy a supplementary rate. As the proposals stand, local authorities can decide to levy a rate, then seek agreement on how it should be spent. Should no agreement be reached, the extra revenues raised would enter the existing national business rate pool, over which business has no influence.

The new proposal is likely to undermine the working relationships that have developed between local authorities and their business communities, but they could also threaten local economic competitiveness in fragile business regions.

Adding weight to the lobby, The Institute of Directors has openly criticised the government’s proposal. In its reply to the government’s Green Paper, IoD deputy head of the Policy Unit, Richard Baron, called on the government not to hit businesses which already faced ‘a heavy tax burden’.

Links

Businesses face tax increases

Business cannot be a ‘cash cow’

FDs oppose business rates hike

Protests over business rates.

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

5d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

3w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

5m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter