Small firms need voice on business tax spending
A small business group has urged that firms be given a say on how the money raised through proposed changes to business rates will be spent.
The Federation of Small Businesses (FSB) has said that it is worried that the upcoming Business Rate Supplements Bill, which is currently being considered by a Public Bills Committee, could mean an increased tax liability for many firms.
The Bill would give local authorities the power to levy extra rates in order to pay for community development projects.
However, the FSB’s concern is that the additional payments could place businesses under more pressure during the economic downturn.
The FSB has, therefore, called for a series of amendments that will dampen the impact of the Bill when it comes into force.
Specifically, the business organisation wants small firms to have a vote on the projects that would be subsidised by the extra tax revenue, with the consultation to be followed by an independent review of the expenditure.
Other recommendations include guarantees that the supplement will only be spent on economic development; that the public sector will also contribute; that properties liable for business rates with a rateable value of £50,000 or less will be exempt; and that the £50,000 threshold will be reconsidered once the property market improves.
John Wright, the FSB’s national chairman, said: “With small business failures entering their hundreds each day and taking thousands of jobs with them, it seems counterproductive to introduce a new tax.
“However, if business owners are to pay this supplement it is important that they have a say on where it goes. This revenue must be ring-fenced for economic development rather than to shore up Government infrastructure projects and local council budgets.”
Mr Wright added: “There must be safeguards in this legislation to ensure the small business community is represented and can benefit from this supplement.”