Tax & Accounting News

CBI warning over Business Rates legislation

06/07/2009

A decision by MPs to throw out amendments to the Business Rates Supplements Bill could harm regional economies, according to the Confederation of British Industry (CBI).

The bill gives local authorities the power to levy extra taxes on businesses to pay for infrastructure projects that are judged to benefit the local economy. But the CBI has argued that firms should be given a vote before the tax powers are used for a particular project, ensuring that extra rates are only raised for schemes that are economically viable and popular with businesses.

Amendments proposed and backed in the House of Lords would have introduced just such a provision, but those amendments were rejected in the Commons.

The current wording of the Bill allows for a 2p supplement to be levied on business ratepayers. If this was adopted across the country, businesses would be paying an extra £800million to local authorities each year – and that figure could rise further when rates are reviewed next year.

CBI deputy director-general John Cridland said: “The rejection of these amendments pokes a finger in the eye of British business at a very difficult time. We had called for sensible changes that would have ensured more effective local government spending.

“They would have helped avoid unnecessary, misguided tax supplements that could lead to further job losses.”

 

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