Cap business rates say MPs - another tax battle for the Chancellor

By Jonathan Walker on Mar 6, 12 10:44 AM in Politics

The Government faces a big public row over plans to axe child benefit for higher-rate tax payers, and a second battle over Lib Dem plans for a "mansion tax".

But there's another row which has been slightly less well-publicised, this time over plans to increase business rates by 5.6 per cent in April.

The increase is based on the retail price index for September last year. But some Tory and Lib Dem MPs argue that the 5.6 per cent figure was a "spike" in the RPI, and businesses should not suffer a major tax rise because inflation was high for a short period last year.

The RPI for January was 3.9 per cent, but the MPs want the business rate increase to be capped at 2 per cent.

A Commons motion calling for a two per cent cap has been signed by four Conservatives and five Lib Dems, including Solihull MP Lorely Burt, chair of the Lib Dem Parliamentary Party.

Birmingham Chamber of Commerce has issued a statement warning that a 5.6 per cent business rate rise will have "a devastating effect on businesses".

There's just two weeks to go before the Budget on March 21.

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