Councils to set supplementary business rate

The Government wants to introduce a supplementary local business rate, on top of the uniform rate, it said in the White Paper on local government it published last week.

"Budgeting for future rate liability will become a nightmare," predicted Jerry Schurder, head of rating at chartered surveyor Gerald Eve. "An occupier with a portfolio of properties in different local authority areas will not be able to predict future bills without actively following each council's spending programme."

Local rates could represent up to 1% of the UBR in year one, and could increase by 1% a year to a maximum of 5%. However, local authorities who satisfy Government performance criteria may be allowed to double these percentages to 10%.

Additionally, rate relief for small businesses with rateable values below £5,000 could mean an extra 2% surcharge for ratepayers that could be limited to either certain areas or categories of ratepayer.

Meanwhile, the White Paper fails to say whether there will be any transitional arrangements to limit large changes after the year 2000 revaluation. It does expect councils to set up partnerships to involve local businesses in spending and tax decisions.

"The Government has missed an opportunity to simplify the rating system," concluded Schurder.