Majority of firms support locally-set business rates

A survey conducted by ComRes for the Local Government Association (LGA) found 68% of firms think the tax should be set by individual councils in discussion with local businesses. Support for the change was higher among companies in the hotel and catering industry (76%) and arts and leisure sector (75%). Just 7% of all the businesses surveyed disagreed.

Almost half (47%) of businesses also said they were concerned about the impact on their businesses of cuts to council services, such as licensing, over the next few years.

Currently, government sets the business rates charge and keeps half of business rate income and growth – extra income earned from new business premises – which it redistributes to local authorities in grants.

'Restricts rate reductions'​

The LGA, which is calling for councils to be devolved powers to set business rates in their local area, claims the current system “hugely restricts” the ability of councils to reduce rates for businesses like pubs, help new firms open and keep small businesses alive.

It adds that councils retaining income and growth from business rates would ensure rate reduction and discount schemes – already up and running in some areas – could benefit thousands more business nationwide.

The LGA is calling on the Chancellor to outline full details of the business rates review announced last year and heed calls from councils and businesses by committing to devolving control of business rates down to local government as part of next month's Budget.

'Lost faith'​

LGA Chair Councillor David Sparks said: "This polling shows that businesses up and down the country and across different industries have lost faith in the current system of business rates and agree that it should be a local tax set by local areas.

"The current system of business rates is not fit for the 21st century and is preventing councils from supporting small businesses and boosting high streets as much as they would like.

"Councils could do much more to support small businesses if we were given the freedom and finance to set rates and discounts locally. We could also invest in infrastructure and vital local services if all of the money a business paid was retained by local government.

"Councils and the majority of businesses agree that it is essential that any reform of business rates must make it a truly local tax which gives them freedom to work together to boost growth and ensure local economies and businesses thrive.”