Business rates 21st May 2016

A Bill to provide a framework for the delivery of a business rates retention scheme was announced in the State Opening of Parliament.

At the State Opening of Parliament on Tuesday, the Queen announced the Government's legislation for the year ahead, including a Local Growth and Jobs Bill. The Bill will put in place the framework for the delivery of a business rates retention scheme, which was first mentioned in the Autumn Statement, allowing for legislation for local authorities to retain business rates. The purpose of this Bill, according to the Government, is to grow the economy by giving local councils an incentive to support business and develop their local economy, allowing local authorities to retain 100% of their business rates.

The Government claims that this Bill would also strengthen local areas by giving them the ability to reduce local business rates tax rates and would give the ability for combined authority mayors to levy a supplement on business rates bills to fund new infrastructure projects, provided they have the support of the business community through the Local Enterprise Partnership. This is similar to the decision of local businesses in London to make a contribution towards Crossrail 1.

Robert Hayton, Executive vice-president at Altus Group, said: "Whilst we are broadly supportive of local business rates retention, as it allows local areas more control over the actions that they take with the aim of to encourage employment and growth, we do have some concerns. We believe there is still a case for some form of redistribution of rates, to assist those areas with lower tax intake to compete with more income-rich areas, without putting too much of a strain on public services at local levels.”