On cusp of automatic business reliefBy Lucy Allen
March 31, 2009
Rates relief for small businesses could be applied automatically under new plans.
The scheme was suggested in a House of Commons debate by MP Sadiq Khan, parliamentary under-secretary of state in the department of communities and local government.
He suggested small businesses would not havge to apply for rates relief if the Government agreed to do it automatically.
The debate was over a Private Member’s Bill put forward by MP Peter Luff and backed by the Federation of Small Businesses, which sought to award rate relief to small businesses automatically, rather than the current system where businesses have to apply for it.
Mr Luff withdrew the Bill after the assurance from the minister.
But he said: “I am glad to hear that the Chancellor is now considering the automatic payment of rate relief to all eligible businesses alongside other measures to help small businesses in the Budget Statement in April.
“It is now up to the Government to deliver on what seemed a pretty clear commitment – and to deliver quickly.
“If they don’t, they will not only be going back on assurances they gave me and the House - they will also be turning their backs on small businesses when they need help the most.”
He added: “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.”
According to the Local Government Association (LGA) £400 million was left unclaimed by businesses entitled to rate relief in 2006.
The LGA estimates the relief can save businesses up to £2,500 a year. Rate relief was made automatic in Wales in April 2007.
The Private Member’s Bill mirrors the FSB’s Keep Trade Local campaign, which is supported by the Standard and its sister papers.
FSB East Berkshire chairman Mary Flavelle 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.”
For more on the FSB campaign, log on to www.fsb.org.uk.