Trends & Features

‘No’ to local business tax – BRC

Retailers will become voteless cash cows if local authorities are given the power to directly tax businesses to fund projects, says the British Retail Consortium.

Reacting to the recent treasury review, Enhancing the Effectiveness of Sub-national Economic Development and Regeneration, the BRC says it is concerned the government is still considering giving local authorities the power to levy ‘supplementary business rates’, which could be used to fund major projects like city tramways and rail systems such as Crossrail.

The BRC believes such a tax would be open to widespread abuse and that local authorities would take advantage of the system to tax businesses to pay for projects, which should be provided through existing budgets, and is calling on the government to rule out its introduction. Retailers already contribute £4.5 billion to local authorities through business rates each year.

Supplementary business rates would also create an uneven playing field between retailers. Shops on opposite sides of the street could be paying different rates of tax, according to the BRC, which could have a distorting effect on property values and inhibit investment in the areas where supplementary taxes are being levied.

Says BRC Director General Kevin Hawkins (pictured): “Giving local authorities the power to directly tax businesses would be like setting Pooh Bear loose on the honey reserves, only this time it’d be retailers that would get stung. Retailers don’t oppose contributing to local projects, as their support of Business Improvement Districts demonstrates, but it would be unacceptable to force them to fork out cash to fund works councils should be providing from existing revenue.

“There should be no taxation without representation. Supplementary business rates would give councillors the freedom to tax businesses without having to face them at the ballot box. The Chancellor needs to consider the very real, negative impact these taxes would have on retailers and rule them out.”

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