UK companies could face an extra tax bill of £1.5bn if councils are allowed to levy a supplementary local business tax of up to 10%, industry trade bodies warned yesterday. Daily Telegraph


The Communities and Local Government Committee has proposed that local authorities should be allowed to charge businesses in their areas a supplementary business rate. The proposal would represent an important step in the move towards devolving power to the regions, said committee chairman Phyllis Starkey.

‘Supplementary business rates would be a significant step forward in terms of liberation and local empowerment,’ she said. ‘If the government gets the framework right, local authorities will be able to take forward these proposals in a manner closely tailored to the specific needs… of the areas they represent.’

However, Natalie Evans, the British Chambers of Commerce’s head of policy, said the plans were ‘completely unacceptable’, since there were already 42 business improvement districts that levied extra taxes. She added: ‘If every council in England made use of supplementary business rates then businesses could be paying an extra £1.5bn a year – a staggering amount.’

British Retail Consortium director-general Kevin Hawkins warned: ‘Giving local authorities the power to directly tax businesses is like setting Pooh Bear loose on honey reserves, only it is retailers that will get stung.

‘We do not support taxation without representation and supplementary business rates would give councillors the freedom to tax businesses without having to face them at the ballot box.’