Overview

The Business Rate Supplements Act 2009 empowers the Greater London Authority and certain local authorities in England and Wales to levy a supplemental tax on non-domestic ratepayers. This levy, known as a Business Rate Supplement (BRS), funds projects designed to stimulate economic development within their areas.

Description

The Act details the process for imposing and managing BRSs. This involves:

Imposing a BRS

• Levying Authorities: The Greater London Authority, county councils, district councils (where no county council exists), and county/county borough councils in Wales.
• Purpose: Raising funds exclusively for economic development projects, not for housing, social services, education, children's services, health services, or planning functions.
• Ratepayers: Non-domestic ratepayers (businesses and owners of empty properties) are liable, subject to certain exceptions (e.g., charities).
• Conditions: Publication of an initial prospectus, consultation with affected parties (businesses and lower-tier authorities), a possible ballot (depending on the expected revenue compared to the project's cost), and publication of a final prospectus before the levy is implemented.
• Ballot: A mandatory ballot is required if the expected BRS revenue exceeds one-third of the estimated project cost, or if the levying authority deems a ballot necessary. Approval requires a majority vote and the aggregate rateable value of properties voting in favor exceeding those voting against.
• Variations: Existing BRSs can be varied, subject to similar requirements as the initial imposition, potentially including another ballot. Increases in the number of liable ratepayers require more than just a variation within the original prospectus.

Liability and Calculation

• Liability: Determined by the rateable value of the property, applying formulas specified in the Act, taking into account factors like small business relief, charity status, and empty property provisions.
• Multiplier: A multiplier is applied to the rateable value to determine the BRS amount. The total of multipliers for a financial year cannot exceed 0.02.
• Reliefs: Levying authorities can apply reliefs, subject to conditions concerning consistency and uniformity across their area.
• Interaction with BID Levy: Rules must be established to handle situations where a property is subject to both a BRS and a Business Improvement District (BID) levy.

Administration

• Notice to Billing Authorities: Levying authorities (if not also billing authorities) must notify lower-tier billing authorities before the start of the financial year about the BRS.
• Collection and Enforcement: Regulations govern collection and recovery, including the power to recover sums even if the project is abandoned.
• Administrative Expenses: Regulations may allow billing authorities to deduct a portion of collected funds to cover collection costs.
• Accounting: Separate revenue accounts are required for each BRS.

National Authority Oversight

• An appropriate national authority (Secretary of State for England, Welsh Ministers for Wales) can intervene if a levying authority acts inconsistently with provided information, potentially directing cancellations, refunds, and other remedial steps.

Government Spending

The Act does not directly affect overall government spending. Instead, it allows local authorities to raise additional revenue through a levy on non-domestic ratepayers for specified purposes, thereby potentially reducing the need for central government funding in those areas.

Groups Affected

• Non-domestic ratepayers (businesses): May face additional tax burdens depending on their rateable value and the specific BRS imposed.
• Local authorities: Gain power to fund economic development projects but also assume administrative responsibilities and potential liabilities.
• Central government: Indirect impact; potential reduction in funding demands from local authorities.
• Charities and other exempt organizations: May be exempt from the BRS, depending on the specific details of the scheme.

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