More than half of small businesses in England are missing out on claiming back up to GBP1,200 off their business rates because they are unaware they are entitled to do so, according to the Federation of Small Businesses (FSB).
The FSB is supporting legislative efforts for this tax relief to be made automatic, which could save businesses GBP400m in total each year. Many small businesses are currently unaware they are entitled to rate relief because many local authorities do not publicise it well enough.
"Every year, around GBP400m, calculated and ear-marked by the Treasury for eligible businesses, goes unclaimed - even though this money poses no extra cost to the government or taxpayer," says the FSB.
In the UK, business rates, a type of local taxation, are paid by businesses and other organisations that occupy non-domestic premises. The payments help fund local services provided by local authorities, such as the police and the fire and rescue service. Business premises are given a rateable value, and the amount of business rates payable is calculated using this value and a 'multiplier,' which is set by the government.
The FSB is currently working with Peter Luff, a Conservative Member of Parliament and Chairman of the parliamentary Business and Enterprise committee, to pioneer a Private Members Bill to make rate relief for small firms automatic, as it is in Wales. Luff's Small Business Rate Relief (Automatic Payment) Bill, is due to be debated in the House of Commons on Friday, March 6.
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.
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