DCSIMG

A change in business rates could help new companies

Simon Burton.      To accompany article on his suggestion to use money retained under a new business rates reform, being introduced from April, to provide rate relief for new businesses and thereby stimulate growth in the town.

Simon Burton. To accompany article on his suggestion to use money retained under a new business rates reform, being introduced from April, to provide rate relief for new businesses and thereby stimulate growth in the town.

A council has been asked to use a rates reform, being introduced by central government, to help new businesses in Bury St Edmunds.

From April, the way business rates are distributed is changing.

Under the current system, they are collected locally and paid into a national pool for redistribution around the country.

But, under the new system, councils collecting anything above a set figure could benefit from a rates retention, keeping up to 50 per cent.

They will still play no part in setting the rates.

Simon Burton, of Bury property agent Barker Storey Matthews, proposed St Edmundsbury Borough Council used money retained under the new system to provide rates relief for new businesses.

At last week’s business ratepayers meeting, he said landlords could only be expected to go so far in helping to subsidise struggling businesses.

The short-term leasing of shops to charities - which receive an 80 per cent reduction in rates - did not, he said, benefit the council and did not stimulate growth, unlike providing rates relief to new businesses, which would be better in the long run.

“If you get the opportunity going forward to offer some sort of subsidy, then you should,” he said.

“If the opportunity came up with business rates, I think we’d look at it very seriously,” said Cllr John Griffiths, leader of St Edmundsbury Borough Council.

The aim of the new system is to provide councils with an incentive for promoting economic growth.

The danger is, if there is a decline in business rates, the council could have to make up that shortfall from its own budget.

To reduce that risk, all of Suffolk’s district councils and the county council have decided to pool any money they retain, with it either being used to establish a reserve to fund potential future safety net payments or with £1 million being split between borough/district councils (50 per cent) and Suffolk public sector leaders (50 per cent).

A spokeswoman for St Edmundsbury Borough Council said: “Suffolk public sector leaders will recommend how the money allocated to them should be spent. Each council will then agree that these recommendations will be ratified by its cabinet/executive.

“In the unlikely event that Suffolk public sector leaders fail to recommend projects where the money should be spent or, if any of the eight council’s executives/cabinets veto the leaders agreement, the default position will be the unspent balance will be split 80 per cent to borough/district councils and 20 per cent to Suffolk County Council.

Any left over funds will be split between borough/district Councils (40 per cent), Suffolk public sector leaders (40 per cent), and Suffolk County Council (20 per cent).

 

Comments

 
 

Back to the top of the page

 

X scottish independence image

Keep up-to-date with all the latest Referendum news