Small business rate relief 'to be automatic'

The Government has pledged measures to help make small business rate relief automatic.

Under legislation to be brought in by the upcoming Localism Bill, small businesses and shops will no longer need to fill out an application form. The Government says this will increase take-up of the rate relief, and will stimulate a "rebalancing and rebuilding" of the economy.

Currently, English small businesses which occupy only one property with a rateable value of less than £18,000 - or less than £25,500 in London - are usually entitled to rate relief. The amount of relief depends on the rateable value of the business.

Local Government Secretary Eric Pickles said that small shops and businesses are "crucial to the country's economy", and highlighted that the Government has already promised to double the amount of rate relief available to businesses next year. Around 345,000 businesses stand to pay no rates at all under the discount.

"All too often the tax support Government offers is tied up in so much red tape small businesses are put off from getting it," Mr Pickles added.

"As we rebalance the economy we are determined to give them a helping hand.

"We want to see as many small business ratepayers as possible to claim their tax cuts, so we will change the rules so councils can administer the scheme without being caught up in unnecessary Government red tape."

In addition, Mr Pickles said that councils would be allowed to set their own local discounts, and said the Government was considering proposals to allow authorities to keep the money they collect.

"This will give councils a genuine financial stake in their local economy and let them target their support at local shops, pubs, post offices and start-up enterprises," he added.

'Victory for FSB'

The Federation of Small Businesses (FSB) hailed the announcement as an "FSB victory".

National chairman John Walker said that the organisation had "long been calling for" the rate relief, adding that the "cash injection" would be a great help to small businesses.

However, he warned that the responsibility now rested with councils "to be creative" and not force businesses to negotiate an application process "when it is obvious they are eligible".

"After rent and wages, rates are the biggest cost to many businesses and steps to help small firms automatically get the relief they are entitled to is welcome news," Walker added.

"We have developed excellent relations with councils across the country through our small business engagement accord and we will be urging them to use their new powers to ensure that all small businesses receive the relief that they are entitled to."

IMAGE by David Jones/PA Wire

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