Small business rate relief 'should be automatic'

Business rate relief should be granted automatically to small firms, the Federation of Small Businesses (FSB) has said.

And the federation is working with Conservative MP Peter Luff to put forward a Private Member's Bill that, if it was passed into law, would ensure local authorities apply the exemption to rate bills for all qualifying businesses.

Since April 2005, small firms in England have been able to claim up to 50% rate relief for premises with a rateable value of up to £15,000, or £21,500 in London.

However, the FSB says that over half of small businesses miss out on the relief because they are unaware that it exists.

The Local Government Association estimates that the relief can save firms up to £2,500 a year. It calculates that in 2006 the amount of unclaimed relief totalled £400 million.

In 2007, business rate relief became automatic for businesses in Wales.

"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," said Roger Culcheth, chairman of the FSB's local government committee.

"With around 85 small businesses closing a day, this move would provide vital support to businesses on the high street struggling with cash flow."