LOCAL businesses have hit out this week at plans to return rate-setting powers to local authorities, claiming that it would lead to an "almighty mess.". The plans, drawn up by the Local Government Association, are aimed at scrapping the current uniform business rate (UBR). At present, businesses all over the country pay the UBR set by central government. This doesn't change according to where the business is based, but this could soon change if the LGA is successful. The Federation of Small Businesses pointed out that when business rates were controlled by local authorities, small businesses in some areas were seen as soft targets and faced large rises. The FSB called on Sir Michael Lyons, who is conducting an inquiry into local government funding, to keep business rates the preserve of central government so that small businesses are not taxed disproportionately. Paul Formstone, chairman of the Farnham & North East Hants Branch of the FSB, said: "Small businesses are the lifeblood of communities, providing employment and essential services for local people. "Nationally they generate over half of UK GDP and employ more than 12 million people. "It is vitally important that they continue to get the certainty of stable, centrally set business rates so that competition between them is free and fair. "Returning the setting of business rates to local authority control could cause an almighty mess and it is small businesses that are most likely to be at the sharp end."
