Councils across England are forecasting a record-breaking £23.5 billion income from business rates next year despite many small businesses paying no rates at all.

Local Government Minister Marcus Jones said the increase – some £400 million – was down to rise in the number of new business across the country.

In future councils that lead the way in driving growth will be rewarded by a change in the rules which will allow them to keep 100% of business rates income.

These changes will be in place by 2020 – but had they been up and running next year councils would have kept all £23.5 billion instead of the £11.75 billion they will under existing rules.

Local Government Minister Marcus Jones said:

“As part of our long-term economic plan British business is on a roll.

Councils already plan on handing out discounts of £3.2 billion which supports charitable work, fills vacant shops and encourages entrepreneurs but we want to further incentivise councils to do even more.

That’s why by 2020 councils will have greater financial autonomy and be handed the power to cut rates as much as they like to boost enterprise in their local areas. And those that do give business a helping hand will reap the rewards – keeping 100% of the additional growth they generate.”