Businesses in England are calling for the tax relief they are eligible for to be made automatic – saving them £400 million in total each year.
More than half of small businesses miss out on claiming back up to £1,200 off their business rates because they are unaware they are entitled to do so. Now they are calling on their MPs to support a Private Members Bill which would see business rate relief granted automatically for small businesses.
Business rates are the third largest cost to small firms, after salaries and rent. Yet, many small businesses are unaware they are entitled to rate relief because many local authorities do not publicise it well enough. Every year, around £400 million, calculated and ear-marked by the Treasury for eligible businesses, goes unclaimed – even though this money poses no extra cost to the Government or tax payer.
The Federation of Small Businesses (FSB) is working with a leading MP to pioneer a Private Members Bill to make rate relief for small firms automatic, as it is in Wales. Tabled by Peter Luff, Conservative MP for Mid Worcestershire and Chairman of the Business and Enterprise committee, the Small Business Rate Relief (Automatic Payment) Bill, is due to be debated in the House of Commons on Friday, 6 March.
Mr Luff also tabled an Early Day Motion in Parliament to raise support for the Bill.
Members of the FSB will be taking action across the country to ask their MPs to champion their case for automatic rate relief. They are supported in this nationwide action by the steering group of the Local Works coalition.
John Wright, National Chairman of the Federation of Small Businesses said: “After rent and wages, rates are the biggest cost to a business and automatically getting the relief they are entitled to would be extremely welcome. During the recession, this cash injection could save many small businesses from laying-off staff or closing down completely.
“Our members will be contacting their MPs to support their call for automatic rate relief – one of the key issues the FSB has been calling for in its Keep Trade Local campaign over the past year.”
Ron Bailey, Director Local Works – Campaign for the Sustainable Communities Act, added: “Communities are falling apart because small businesses are in danger. Making automatic the rate relief to which they are entitled would not only help small businesses stay afloat, it would also be a step towards keeping communities together. And this would in turn help with climate change as it would reduce the need to travel to shop and work.”