Independent firms could pay less to trade after the Local Government Association (LGA) said that local government should set local business rates.
Authorities are concerned that smaller businesses, such as craft bakeries, which do the majority of trading on the high street and not online, are being unfairly impacted by current business rates.
Councils are also calling for government to explore the potential for linking business rates to turnover and e-commerce as part of the reforms to make business rates fairer.
This would allow councils to have more flexibility to reduce business rates on a circumstantial basis, for the types of shops and businesses that locals want in their high streets.
The Chancellor is being urged to deliver a boost for small businesses in next month’s Autumn Statement by committing to devolving control of business rates down to local government.
Councillor David Sparks, chairman of the LGA, said: “We need a system of local business taxation which is fit for the 21st century, which supports the areas in which companies operate and which helps, rather than hinders, business and the growth of our economy.
“The current system is failing to do that. Councils cannot support their local businesses as much as they would like to. There are many areas in which local authorities have been successful in helping new firms to open and keep small businesses alive, but in reality we are working with one hand tied behind our backs.”