Government proposes reform of business rate collection

The legal requirement for ratepayers to fill in an application form first if they are to obtain Small Business Rate Relief will be scrapped in the Localism Bill, the government has announced.

The Department for Communities and Local Government said councils would be free to administer the relief “in a way that best serves local businesses and local needs”.

Communities Secretary Eric Pickles said the government was also looking at whether to let councils keep what they collect, a move he said could give local authorities “a genuine financial stake in their local economy” and greater incentives to promote local economic growth.

Under the plans, councils would have the power to set local discounts on business rates as long as they are funded locally. The DCLG said this would allow local authorities to respond to local circumstances “such as supporting the local pub or post office if they are struggling or encouraging new start-up enterprises”.

The government also plans to:

• amend secondary legislation to ensure that all eligible businesses automatically have their discounted bills calculated using the small business multiplier, and
• hand increased powers for businesses to hold a ballot on Business Rate Supplements. “This will allow liable businesses to vote for and in effect approve the planned economic development project they will be funding”.

The Communities Secretary said: "We have already doubled the rate discount small businesses get, but we want to see as many small business ratepayers as possible to claim their tax cuts so we will change the rules so councils can administer the scheme without being caught up in unnecessary government red tape.

"We shall also let councils set discounts locally and we are considering proposals to let them keep what they collect. This will give councils a genuine financial stake in their local economy and let them target their support at local shops, pubs, post offices and start-up enterprises."