Council could 'clobber' firms with stealth tax

Date: 3rd December 2008

Business start-ups are concerned that new legislation could result in severe new stealth taxation on the sector.

Announced today (December 3rd) as part of the Queen's Speech, the Business Rate Supplementary (BRS) bill could see local authorities substantially raise corporate taxation.

Under the terms of the bill, councils will have the power to introduce a business rate supplement of 2p per £1 of rateable value for a large number of British firms.

Director general of the British Retail Consortium, Stephen Robertson, commented: "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."

He added that with the retailers already paying out £5 billion a year in business taxation, the BRS could see the sector forking out a further £160 million in taxation annually.

In normal circumstances, business taxation is raised every year in line with September's retail price index inflation report to ensure yearly increases are predictable.