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Business rate boost ‘is a con’
Town hall bosses could mount a legal challenge against a Government “con” which will leave it up to £7.6 million out of pocket.
From April Brighton and Hove City Council will begin to keep some of the business rates paid by firms in the area.
The Government, which will continue to set the tariff, believes the decision to localise and partly-incentivise the system will boost growth.
However, in a move described by councillors as “utter tosh”, it has emerged that as part of the deal town halls will be asked to foot the bill for any appeals that firms make against the annual charges.
For Brighton and Hove this could reach £7.6 million in the next financial year.
Against the background of funding being slashed local authority bosses have said they are considering joining with other councils to mount a legal challenge.
Speaking in a town hall meeting Green councillor Pete West said: “We have been utterly shafted by central government.
“I do not think the Sheriff of Nottingham could have done something worse.”
Labour councillor Gill Mitchell added: “It’s utter tosh and a complete con.”
Despite all local authorities having to draw up plans by the end of January the Department for Communities and Local Government is still issuing guidance and details on the scheme.
Just hours before being signed off by the council last week finance director Catherine Vaughan said it had emerged there was a possibility of “safety net funding” of about £4 million from Whitehall. However, exact details and confirmation will not be available until after the January 31 deadline.
Council leader Jason Kitcat described the whole process as “madness”.
But Conservative councillor Geoffrey Theobald said “the government is doing this is to encourage growth”.
Brighton and Hove’s agreed business rates formula for 2013/14 is 47.1p.
Instead of receiving a redistributed sum from Whitehall, the council, which will continue to bill for and collect the money, will retain 49% of the total – about £50 million.
Of the remainder 50% will be paid to the Treasury and 1% to East Sussex Fire Authority.
Rating valuations are updated every five years. The next one due in 2015 has been deferred by the government until 2017.
Owners and tenants can appeal their rateable value at any time. This means that firms can appeal at any time up to 2017 about the 2010 valuation.
Reasons for appeal include alterations to a property, a new development in the area or changes to roads and footpaths.
The appeals process is administered by the Valuation Office Agency and it can take several years to resolve
When an appeal is successful, the sum is backdated.
This means that appeals made in 2012/13 will see business rates refunded for 2010/11 and 2011/12 as 2010 was when the last review was done.
There are more than 800 appeals against the 2010 valuation currently outstanding and about 30% are expected to be successful.
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