CBI chief warns of £750m rates bomb

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.

Speaking at the British Chambers of Commerce annual conference in London, Jones said extra business rates could increase company costs by as much as £750m.

‘We have been pointing out for months that supplementary business rates are the wrong way to go,’ he said. ‘Companies see them as nothing more than extra taxes that will damage competitiveness and deter much-needed investment.’

He added that although the CBI wants local authorities and business working more closely like the government, it believes supplementary rates are counterproductive. He also pointed out UK property taxes are higher in the UK than in key competitor countries, such as Germany, France, Spain and Italy.

Jones’ call will put renewed pressure on the Department of the Environment, Transport and the Regions which is already reported to be reconsidering the plans. As an alternative the department is said to be considering the introduction of small business improvement districts, allowing businesses to decide with local authorities on whether local taxation is justified.

Final plans are expected to be published in a white paper from the DETR later this year.


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