Local Authorities granted new tax power over retail

The Business Rate Supplementary Bill, re-introduced yesterday after a 20-year absence, could saddle retailers with new tax costs imposed by local authorities, according to the British Retail Consortium.

The supplements could potentially add an extra £160 million per year to the tax bill of retailers nationwide.

Stephen Robertson, BRC director general, said: "At a time when retailers are being hit by rising costs and falling sales, this Bill gives local authorities the power to clobber businesses with a hefty new stealth tax.

"Retailers already pay £5 billion a year in business rates – more than any other sector – and BRS would see them forking out an extra £160 million a year. When you combine this with an onslaught of other property cost increases, including the 2010 Rates Revaluation and the end of Empty Property Rate Relief, this is another burden on retailers when they can least afford it.

"Retail is responsible for three million jobs in the UK. It is vital to local economies, to regeneration and communities. As we head into recession the Government should be reducing the burdens on retailers, not compounding them."

Under the new legislation the Government has granted local authorities power to introduce a Business Rate Supplement of 2p in the £1 of rateable value with an exemption for business properties with a rateable value of £50,000 or less.

Research carried out by GL Hearn and Investment Property Databank highlights that the retail sector will face a 16 per cent cumulative increase in its rates bills from April 2010.

More comment and analysis on the new rates can be found here