Local authorities want to set business rates

Local councils should have the power to set business rates, the Local Government Association (LGA) has told the Chancellor.

The LGA, which represents local authorities across the country, is calling on the government to allow councils to set their own business rates in order to benefit local businesses.

Currently, national government sets the charge and receives 50% of business rates income which it then redistributes to local authorities.

The LGA is urging the government to:

  • allow local authorities to set rates and discounts
  • allow local government to retain 100% of business rates income
  • create an independent body for distributing funding to councils
  • provide support to local government to prevent business rates avoidance.

Councillor David Sparks, chair of the LGA, said the current system is failing to support local business:

"We need a system of local business taxation which is fit for the 21st century, which supports the areas in which companies operate and which helps, rather than hinders, business and the growth of our economy.

"The current system is failing to do that. Councils can't support their local businesses as much as they would like to. There are many areas in which local authorities have been successful in helping new firms to open and keep small businesses alive, but in reality we are working with one hand tied behind our backs.

"The money which a business pays should be retained by local government to invest in the vital local services, all of which help local businesses either directly or indirectly."

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