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Supplementary Business Rates will hit local jobs, says FSB

The Federation of Small Businesses has called on the Government to drop its plans for a supplementary business rate. The UK’s largest business organisation also repeated its belief that variable business rates across the country are a backward step. The FSB believes that if local councils wish to raise more money from businesses in their area then the Business Improvement District mechanism, which allows businesses in the area a vote on proposals, is the better way forward.

The Uniform Business Rate was established in 1990 specifically to prevent local councils in certain areas of the country from hitting firms with inflation-busting business rate increases.

The FSB is also concerned that local economies will suffer if councils get the ability to raise further funding from the business rate. This is because councils would be able to avoid upsetting voters with higher council tax bills by putting up the business rate instead.

Roger Culcheth, FSB Local Government Chairman, said:

“Varying the business rate or creating a supplementary business rate is unnecessary. The mechanism to raise extra money from businesses for specific local projects is already in place through Business Improvement Districts (BIDs), which at least allow businesses a vote on the proposals. There is no need for further schemes to take money from employers for local government expenditure, especially without their consent.

“Small businesses remember the lack of understanding of business needs in some councils, leading to huge cost increases for employers, which inspired the nationally-set business rate in the first place. UK businesses already face some of the highest property taxes in the world and although the current system of local business taxation may not be perfect, making it more onerous will not help employers to sustain economic growth and create new jobs. The supplementary business rate and variable business rates have been shown not to work by bitter experience in the 1980s. Their proposed resurrection should be dropped immediately.”



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Federation of Small Businesses

Federation of Small Businesses

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