View Authors December 2011
The Government announced in October 2010 that it would introduce new borrowing powers to enable local authorities in England to carry out Tax Increment Financing ("TIF"). TIF originated in the US where it has been successfully used for at least 50 years and there is no reason why it should not be deployed in the UK once local authorities are given powers to retain additional business rates. However the British Council of Shopping Centres (BCSC) recently wrote to the deputy Prime Minister calling for the early introduction of a developer led TIF model known as the Local Tax Reinvestment Programme (LTRIP). This would not require any borrowing by the local authority but would instead be based on the developer financing the project out of its own resources and then being repaid out of the tax increment generated from the increased NNDR as and when it arises. In this article we review the Government’s proposed reforms of the business rates system and look at the local authority and developer led TIF models. We also consider whether TIF can unlock stalled town centre development schemes.