New tax raising powers for local authorities ‘worrying’

3 July 2009

A leading business group has described new powers that will enable local authorities to charge additional rates as “deeply worrying”.

The British Chambers of Commerce (BCC) was commenting ahead of royal assent being granted to the Business Rates Supplements Bill.

The Bill allows for a 2p supplement to be levied on business ratepayers in order to fund specific infrastructural projects in the local economy.

Along with other business organisations, the BCC has been arguing that local firms should have a vote on whether to support or to reject the additional tax payments for such projects.

David Frost, the director general of the BCC, said: “It is deeply worrying that during a recession, the government has decided to introduce a new power for local authorities to raise taxes on cash-starved businesses.

“Companies are already paying business rates, corporation tax, VAT and National Insurance. On top of this, they could also be looking at a combination of Business Rate Supplements, congestion charging and a workplace parking levy."

The BCC expressed fears that businesses will face a situation where decisions on rates supplements may be taken unilaterally by local authorities.

It urged councils to listen to local firms and, considering the current economic climate, not to make use of the new power.