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The Business Rate Supplement

06 May 2009

Comment from Sarah Davey - Head of Rating, London

The Business Rate Supplement looks set to become law by 1 April 2010. The Bill will provide powers to local authorities to levy additional business rates against rateable values over £50,000 to fund specific local economic development, such as infrastructure projects.

Whilst ratepayers must be consulted and have an opportunity to vote before any supplement is introduced this will only kick in where the supplement would fund more than one third of any one project. As a practical example, it is difficult to envisage a supplement levied by the Greater London Authority funding anything like one third the cost of Crossrail. I'll leave you to draw your own conclusions.

Gordon Brown considers the Bill will provide a ‘vital new tool for councils to promote long-term economic growth'. Nevertheless, in these tough economic times, it will be seen as a kick in the teeth to many ratepayers, particularly at a time of great uncertainty with the introduction of the new 2010 rating list, which could reset values as much as 100% or higher than at present, particularly in some areas of London.

Once again, small to medium enterprises will bear the brunt of added business rates expense at a time they can least afford it. Isn't it about time they got some relief if they, the ‘engine room' of the British economy, are going to do their job and begin to kick-start the country towards recovery?

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