Government urged to adopt rate relief measures

11 September 2008

The Federation of Small Businesses (FSB) has called on the government to implement two important business rate measures that would help small businesses cope with the current challenging economic conditions.

In a letter to the Prime Minister, Gordon Brown, the FSB highlighted the number of small firms that are unaware of the Small Business Rate Relief Scheme (SBRRS).

Under the SBRRS, eligible businesses in England can claim as much as 50 per cent off their rates bills provided their property has a rateable value of less than £5,000.

As the rateable value of the premises rises so the level of relief declines correspondingly on a scale of 1 per cent for every £100 of rateable value over £5,000 and up to £10,000. When the rateable value reaches £10,000, the relief is 0 per cent. Similar schemes also operate in Scotland and Wales.

However, the relief, which applies to one property only, is not automatic. Businesses must apply to their local authorities to claim the saving.

A recent FSB survey in Essex showed that £48.4 million of rate relief went unclaimed in that county alone.

The FSB has therefore asked the Prime Minister to ensure rate relief is automatically applied to all rate bills handed out by town halls.

The second measure the FSB wants to see is a reinstatement of rate relief of up to 50 per cent for entrepreneurs with empty commercial premises.

John Wright, the FSB's national chairman, said: "Business rate relief is money which small businesses are entitled to claim and presumably 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 government's budget calculations.

"Additionally, with the dramatic downturn in the commercial property market owners are finding having to pay rates on empty properties a hardship. A modest relief of up to 50 per cent on the rate bill for empty properties would be very helpful."

Mr Wright concluded: "These two changes will give a much needed boost to the economy and help businesses get back on track."