The British Retail Consortium (BRC) branded the proposals as "spectacularly naive", and the Association of Convenience Stores (ACS) and the Federation of Small Businesses also expressed serious concerns about a report by the Communities and Local Government Committee which calls for the introduction of a local supplementary business rate (SBR) to increase local government finance.
If introduced, a SBR could be levied on businesses without a ballot, and the decision whether there should be an exemption for small businesses would be made at a local level. Retailers would effectively be powerless to oppose any extra levy of up to 10% of their regular business rates.
Atul Sodha, who runs a Londis store in Harefield, Middlesex, is outraged by the proposals. "We're paying too much in business rates as it is, so this will be an extra tax that's going to be detrimental to our businesses. And where is this money going? There's no transparency."
The BRC maintains that the tax would be open to abuse and local authorities would not be able to resist the temptation to tax businesses to pay for projects that should be funded by existing budgets.
ACS chief executive James Lowman said SBRs would be an unnecessary added burden and cause confusion for retailers. He added: "We are disappointed that the committee did not state the need for an exemption for small businesses who would be the hardest hit but gain the least."