Employers Must Have Vote On UK Supplementary Business Tax, Says CBI

by Jason Gorringe, Tax-News.com, London

21 August 2007

The Confederation of British Industry (CBI) has joined other representatives of business interests in the UK in calling for companies to have some say in the setting of local taxation.

Commenting on the report on supplementary business rates from the Communities and Local Government select committee, John Cridland, CBI Deputy Director-General, explained that: "If business is to have confidence that a supplementary tax is set appropriately and used wisely, it must have clearly defined limits and safeguards."

"Giving employers a vote is the only way to ensure they're bought into a local project, yet the report only recommends a ballot if the extra levy is above ten percent. This would give councils almost unfettered authority to raise vast amounts of money without the need to win support through the ballot box," he cautioned.

British industry has previously warned that efforts to improve the UK's tax competitiveness may be undermined at local level if certain recommendations of the Lyons Review of Local Government are put in place.

Recently, the British Chamber of Commerce said that the proposal by the parliamentary committee to make businesses pay up to 10% on top of their local business rates would give local authorities licence to raise hundreds of millions of pounds in extra revenues.

"If every council in England made use of SBR’s then businesses could be paying an extra GBP1.5 billion a year, a staggering amount," Natalie Evans, Head of Policy at the BCC stated.

Evans observed that the review of local government by Sir Michael Lyons recommended that the cap on any SBR should be set at 4%, but the Select Committee is proposing no national cap - "a recommendation that will be manna from heaven for local council officials looking to get their hands on extra revenues".

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