Changes for business rates on hold

Government plans to change the way business rates are controlled have been shelved.

Licensees were being prepared for an announcement this week that could have led to rises in the rates of up to 45 per cent.

The figures were based on the suggestion that control of funds would be transferred from central government to local authorities.

This could have resulted in local authorities dictating higher amounts depending on the funding they needed, putting the burden of cost on pubs and other small businesses.

But Local Government Minister, Nick Raynsford, has now said that the council tax structure needs more consideration and has put on hold any immediate changes.

He said: "It is clear that council tax is far from perfect and that changes are needed, but needs extremely careful examination and detailed consideration".

David Bishop of the Federation of Small Businesses, which represents 5,500 licensees, said: "The government has kicked this into the long grass. The idea that the control would be transferred to local authorities has been rejected for now but it is still on the table and there is a danger it could happen in the future."

Kevin Hawkins, director general of the British Retail Consortium, said: "This is a significantly better outcome for small businesses than some of the options the Government has previously put forward. We are glad we have helped persuade Ministers to adopt a more favourable approach although there could still be significant increases in the later years of the scheme."

Business rates are currently based on a Uniform Business Rate that is set by the government, which only rises in line with inflation.