William Eichler 25 November 2015

Spending Review: Local authorities to retain 100% of business rates

Local authorities will be able to retain 100% of their business rates, the chancellor announced in today's Spending Review.

George Osborne has reaffirmed his commitment to allow councils to keep all of the money raised through taxing local businesses operating in their areas. Nationally, this adds up to an estimated £26bn.

Local authorities will also, according to the Chancellor, be able to lower business rates in order to attract business investment.

Directly elected mayors too will have new fiscal powers. They will be able to raise rates on the condition that they use the revenue to invest in local infrastructure.

Central government grants will also be phased out.

Historically, local authorities paid all revenue raised through business taxes to the Exchequer. It would then be redistributed on a needs-basis according to the Formula Grant System.

This changed on 1 April 2013 when the Government allowed local authorities to retain 50% of business rates, while the remainder went to Whitehall.

Finally, in October 2015 the Chancellor announced that councils would be allowed to keep hold of 100% of the revenue derived from local businesses.

Today's announcement to 'abolish uniform business rates', as he said in the Spending Review, is an integral part of the Chancellor's 'devolution revolution', an attempt to correct what he characterised as the 'geographical imbalance' in the UK.

By devolving the responsibility for business rates to councils, the Chancellor hopes to encourage local authorities to become more competitive and to focus their attentions on attracting private investment into their own areas.

Reacting to the Chancellor's October announcement, Cllr Gary Porter, chairman of the Local Government Association (LGA) said: 'Councils and businesses both agree that business rates should be a local tax set by local areas. It is right that all of the money which a business pays is retained by local government and this will be a vital boost to investment in infrastructure and public services.'

SIGN UP
For your free daily news bulletin
Highways jobs

Educational Psychologist - Main Grade

Essex County Council
£43483.0000 - £63394.0000 per annum
Educational Psychologist - Main GradePermanent, Full Time and Part TimeSoulbury Psychologists Scale A from 3 to 8 plus SPA opportunityLocation
Recuriter: Essex County Council

Service Desk Analysts

Durham County Council
£27,274 to £29,542 p.a. pro rata for part time post (Grade 5)
A vacancy has arisen within Digital Services for two Service Desk Analysts to provide ICT support to corporate and external customers and schools in a Durham
Recuriter: Durham County Council

Crematorium Attendant

Durham County Council
£29,071 - £32,046
 Part time post 14.5 hours Are you a compassionate, professional individual who can provide excellent service during some of life's most difficult mo Durham
Recuriter: Durham County Council

Communication Support Worker

Durham County Council
£33,673 - £37,563
Temporary Contract review will take place at end of July 2027. Part time - 8 hours per week Term time only plus 2 weeks Required to start January 2027 Durham
Recuriter: Durham County Council

Teaching Assistant

Durham County Council
£26,016- £26,847 (Pro Rata)
Temporary Contract until August 31st 2027 Full Time- Term Time + 2 weeks Start date to be agreed with Headteacher   Framwellgate Moor Primary is an Ou Durham
Recuriter: Durham County Council
Linkedin Banner