Issue 1 – January 2008

Supplementary Business Rates

The pre-budget report also revealed proposals to allow local authorities to levy a supplementary local business rate in certain situations.

Unlike the Business Improvement Districts, which were usually welcomed and sometimes demanded by local businesses, the supplementary business rates will be imposed, albeit with certain safeguards.

The essential elements of the proposals are:

• The maximum levy will be an additional 2p in the £1 assessed on the rateable value of the property
• It will only apply to properties with a rateable value exceeding £50,000
• It can be levied only in respect of projects that would not otherwise have happened
• If the levy is intended to raise more than one third of the total cost of the project proposed, then a referendum must be held with a simple majority in favour for the project to proceed.

Quite how widely this new power will be used remains to be seen but, with all the other financial pressures on business and the retail sector in particular, we hope and expect that a certain amount of restraint will be exercised.

For further information contact daniel.lipman@mishcon.com