Eversheds comment: United Kingdom business rates overhaul announced

Councils will be allowed to keep the rates they collect and use the money to invest in infrastructure, making their local areas a more attractive place for businesses to thrive.

Currently, 50 percent of revenues from business rates are sent to the finance ministry which then sends money back in the form of grants, which vary depending on social deprivation and other factors.

The uniform business rate set in Whitehall will be scrapped, and local councils will take control of the setting of the controversial levy.

“Mr Osborne told the Conservative party conference in Manchester that the move will be the “…biggest transfer of power to our local government in living memory”. At the moment, rates are calculated by multiplying the rental value of a property by either the standard rate of 49.5p or the lower rate of 48p, before subtracting any relief.

The reform was announced in the Chancellor’s speech to the Conservative annual conference in Manchester, as he claimed the mantle for the Tories as “the builders” with a plan for a prosperous future for working people.

Meanwhile, John Cridland, director-general, of the Confederation of British Industry (CBI), the UK’s biggest business lobby group, said the “devil would be in the detail”. Business rates had previously been under review by the government.

“We applaud the positive step in ensuring the United Kingdom has a long term plan for investment in our road and rail networks”.

According to the Chancellor, it means councils will have an incentive to help their local economy grow. Regenerate a high street, and you’ll reap the benefits. Whether you’re a bank rigging interest rates, a vehicle manufacturer cheating on emissions or a company not paying your fair share of tax, be warned – we will come after you.

The grant from central government given to councils will end.

During the financial crisis, many thousands businesses were ultimately pushed into bankruptcy because of business rates bills.

Its director Peter Riddell said: “The creation of a National Infrastructure Commission is a key recommendation of our Programme for Effective Government, building on our work with the LSE Growth Commission”.

The chancellor also announced the implementation of a national infrastructure commission lead by Lord Adonis, which ICAEW said would be a “more strategic, long-term vision for economic growth”.