Local authorities have been given the power to levy new business rates to fund important infrastructure schemes.
The Business Rates Supplement Act was given Royal Assent on 2 July to allow county councils, unitary district councils and the Greater London Authority to raise a supplement on the business rate of 2p per £1 of a business’s rateable value to fund large schemes.
The Greater London Authority is set to be the first body to use the power, to fund its share of the cross-London rail project Crossrail.
Business with a rateable value of more than £50,000 could be taxed under the scheme.
Businesses would be able to vote on whether a levy could be charged on all projects except Crossrail. The vote would be given where the supplementary business rate would fund more than a third of the project’s total cost.
Rosie Winterton, local government minister, said this would give power back to local communities to push forward infrastructure schemes.
‘Business Rate Supplements will not be applied in every community, but this discretionary power does mean councils will be better placed than ever to make the most of the upturn and ensure their local economies thrive,’ she said.