MP’S BILL WILL HELP SMALL BUSINESSES
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MP’S BILL WILL HELP SMALL BUSINESSES

Peter Luff is working with the Federation of Small Businesses (FSB) to pioneer a Private Members’ Bill (PMB) which would see business rate relief granted automatically for small businesses - a vital boost during the economic downturn.

Peter Luff, Conservative MP for Mid Worcestershire and Chairman of the Business and Enterprise committee, came fourth in the ballot for PMBs and will put forward the FSB’s Small Business Rate Relief (Automatic Payment) Bill to apply rate relief automatically for small firms.

Over half of small businesses miss out on the relief because they don’t know about it and the FSB is pleased to be working with Mr Luff to introduce legislation that would ensure that local authorities include the exemption on rate bills automatically.

According to the Local Government Association (LGA) £400 million was left unclaimed by businesses entitled to rate relief in 2006. The LGA estimates that the relief can save businesses up to £2,500 a year. Rate relief was made automatic in Wales in April 2007.

The Private Members’ Bill mirrors the FSB’s Keep Trade Local campaign, an element of which urges local councils to automatically apply rate relief to ensure that small businesses can compete and survive on the high street.

Commenting, Peter said:

“The worsening economic situation is having a devastating effect on small businesses. A recent study shows small businesses are collapsing at a rate of nearly 100 a day. My bill provides a simple way of easing the pain for many of them.

“Only around half of small businesses know about rate relief and apply for it, despite the fact the Government has budgeted to cover all small businesses. So most/half of the £400/£800 million earmarked to help small businesses goes unclaimed.

“Making these payments automatic would ensure the money gets directly to those who need it. It will be a boost to small businesses and even cut administrative costs for the local authorities that promote the availability of the rate relief. 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.”

Chairman of the FSB’s Local Government Committee Roger Culcheth added:

“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.

“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.”

ENDS

Notes to Editors

1. The FSB is Britain’s leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk

2. Peter Luff, Conservative MP and Chairman of the Business and Enterprise Committee, is Number 4 on the Private Members Bill Ballot.

3. How Small Business Rate Relief Works in England and Wales

· Since April 2005 small businesses in England have been entitled to claim up to 50% rate relief from their local authority for premises with a rateable value of up to £15,000 (£21,500 in London);

· The claims system was simplified slightly in 2007 (applications can now cover more than one year and business have until 2010 to claim for rate relief from 2007 onwards), but research suggests that this has not affected the large sums of money still going unclaimed each year.

· From 1st April 2007, the Welsh Assembly Government introduced legislation to provide rate relief automatically;

· Businesses with a rateable value of up to £2000 receive a 50% reduction in their rates and businesses with a rateable value of £2001 - £5000 receive a 25% reduction automatically;


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