FSB and MP unite to make small business rate relief payments automatic
The Federation of Small Businesses (FSB) is working with a leading MP to pioneer a Private Members’ Bill (PMB) which would see business rate relief granted automatically for small businesses – a vital boost during the economic downturn.
Peter Luff, Conservative MP for Mid Worcestershire and Chairman of the Business and Enterprise committee, came fourth in the ballot for PMBs and will put forward the FSB’s Small Business Rate Relief (Automatic Payment) Bill to apply rate relief automatically for small firms.
Over half of small businesses miss out on the relief because they don’t know about it and the FSB is pleased to be working with Mr Luff to introduce legislation that would ensure that local authorities include the exemption on rate bills automatically.
According to the Local Government Association (LGA) £400 million was left unclaimed by businesses entitled to rate relief in 2006. The LGA estimates that the relief can save businesses up to £2,500 a year. Rate relief was made automatic in Wales in April 2007.
The Private Members’ Bill mirrors the FSB’s Keep Trade Local campaign, an element of which urges local councils to automatically apply rate relief to ensure that small businesses can compete and survive on the high street.
Chairman of the FSB’s Local Government Committee Roger Culcheth said:
“Business rate relief is money which small businesses are entitled to claim and provision is made within the Government’s financial calculations for such claims to be made so this could provide a significant boost for small businesses without affecting the Treasury’s budget calculations.
“With around 85 small businesses closing a day, this move would provide vital support to businesses on the high street struggling with cashflow. It would support local economies by ensuring the survival of the high street and the jobs and services it provides.
“We are pleased to be working with Mr Luff to ensure that a system is set up in England, similar to Wales, where the relief is applied automatically.”
Peter Luff added,
“Making these payments automatic would ensure the money gets directly to those who need it. It will be a boost to small businesses and even cut administrative costs for the local authorities that promote the availability of the rate relief. Rates are the third largest item of expenditure for small businesses after wages and rents, so this relief would make a huge difference.
“Small businesses need help, and I am convinced this is an effective way of doing that.”
ENDS
Notes to Editors
1. The FSB is Britain’s leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk
2. Peter Luff, Conservative MP and Chairman of the Business and Enterprise Committee, is Number 4 on the Private Members Bill Ballot.
3. How Small Business Rate Relief Works in England and Wales
- Since April 2005 small businesses in England have been entitled to claim up to 50 per cent rate relief from their local authority for premises with a rateable value of up to £15,000 (£21,500 in London);
- The claims system was simplified slightly in 2007 (applications can now cover more than one year and business have until 2010 to claim for rate relief from 2007 onwards), but research suggests that this has not affected the large sums of money still going unclaimed each year.
- From 1st April 2007, the Welsh Assembly Government introduced legislation to provide rate relief automatically;
- Businesses with a rateable value of up to £2000 receive a 50 per cent reduction in their rates and businesses with a rateable value of £2001 – £5000 receive a 25 per cent reduction automatically;
Contacts:
Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 7592 8128 / 07917628998
Prue Watson: 020 7592 8121 / 07825 125695
Marc Shoffman: 020 7592 8113 / 07595 067068
For regional FSB contacts please go to www.fsb.org.uk/regions
