Local authorities including the Greater London Authority have been granted the power to raise a supplement on the business rate and to help fund new projects aimed at developing their local economies.
The new discretionary power, which is contained in the Business Rate Supplements Act which received Royal Assent last night, will be used in London to help fund the Crossrail scheme. The new powers have been granted to county councils, unitary district councils and the Greater London Authority.
Business properties with a rateable value of £50,000 or less will be exempt from any Business Rate Supplement, a condition Ministers at the Communities and Local Government department say will exempt most smaller businesses.
Local Government Minister Rosie Winterton said the new powers were an example of government “moving real power back to local communities and helping local communities to plan for the upturn in this country.”
Funds raised from the new powers must be used for additional investment initiatives and cannot be used as additional revenue for existing services. The amount which can be charged is capped at 2p per £1 of rateable value.