Business leaders have called on the government to rethink a tax that councils will be able to levy on businesses. Financial Times

The Institute of Directors and the British Chambers of Commerce say the supplementary business rate will be the latest in a series of burdens imposed on companies.

Miles Templeman, director-general of the Institute of Directors, said that the SBR would 'rock' business because it would be imposed on companies regardless of their profitability.

The levy, to be introduced in 2010, would be used for specific infrastructure projects upon which local businesspeople would have a vote in some circumstances.

With councils facing a financial squeeze, however, there is a suspicion some local authorities may seek to use the new rate to help plug funding gaps. Up to £600m a year could be raised if all authorities implemented the levy, according to an estimate from the Local Government Association.

Companies already pay business rates levied at about 44% of the rateable value of a commercial property, usually akin to its annual rental value. The SBR would add a further 2% to this.