£23bn business rates revenue not good news for everyone
Government figures reveal local authorities in England are expecting to receive their share of a “record-breaking” £23.5 billion in business rates next year.
Based on figures released earlier this month, local government minister Marcus Jones said that the projected £400 million increase in business rates receipts could be attributed to the rising number of new businesses across the country.
Interesting use of the word “could” here as the figures came out at the same time as the CBI pushed out its pre-Budget submission. They criticised the Government for milking small businesses over recent years with an outdated business rates regime. The CBI obviously feels its members are being used as a Government cash generator that is deemed politically acceptable as it doesn’t impact the general voting electorate or count as a tax hike in the true sense of the word.
Since 2012, local authorities have been able to keep 50% of the business rates that they collect. This is due to increase to 100%.
As widely reported, from 2020, the government intends to abolish the uniform business rate (UBR) and give local authorities the power to cut rates as a way of attracting businesses to their areas. Areas with elected mayors will be given additional powers, including the ability to increase business rates by up to 2p in the pound with the support of local businesses.
So a record-breaking £23.5bn is forecast for business rates but whilst the Government is trumpeting this as good news, it certainly hasn’t been welcomed as such by the businesses that are having to pay it.
Tory peer Lord Wolfson has said that business rates need to be updated to reflect major changes in retail.
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