smallbusiness.co.uk: Helping your business think big

Cash-starved businesses are to be charged additional tax, as the government’s Business Rate Supplement Act passes into law.

The new law allows local councils to support projects aimed at economic development through the tax. The amount charged is capped at 2p per £1 of rateable value and is expected to be introduced in April.


Julie Calder, chair of the Business Centre Association (BCA), says: ‘Councils now have the power to demand a Business Rate supplement on top of the bills businesses are already paying, such as corporation tax, VAT, National Insurance and the business rate bill.


‘Despite the current economic climate, the government seem determined to raise income from cash-strapped businesses.’

Phil McCabe, spokesperson for the Forum of Private Business, says: ‘There is a concern that businesses will be paying more, but will see very little in return for it. On its own the Business Rate Supplement will represent a substantial increase for small businesses, but with all the other rate increases happening the costs will become very significant.’

The government has outlined that the Business Rate Supplement would be levied on business premises with a rateable value of more than £50,000. The funds will be used for projects identified by the local authority such as tidying up local high streets and shopping precincts and cannot be used as additional revenue for existing services.