The Federation of Small Businesses (FSB) has urged the government to extend the 75 per cent business rates relief discount for retail, hospitality and leisure firms to provide targeted help to hard-pressed small businesses.
The trade body is calling for the relief to continue beyond the April cut off in England, throwing a lifeline to thousands of small firms in town centres and on high streets that are vulnerable to increasing costs.
“Government needs to bring about a sea change when it comes to business rates. It’s long been known that the system is not fit for purpose and needs an urgent overhaul. Small firms have taken on huge cost burdens in recent times and the chancellor has an opportunity here to take action on business rates, while enabling small businesses to grow,” Martin McTague, FSB national chair, said.
“For many small businesses on the high street and town centres, the current relief is a lifeline. In April this is due to end, creating a cliff edge that will be hugely damaging to thousands of businesses. Ensuring the relief is maintained for those businesses that need it most will be key to their survival.”
With the Autumn Statement on the horizon and ongoing work on the Non-Domestic Rating Bill this month, the government has the opportunity to make meaningful changes on business rates to help under pressure small businesses, FSB noted.
Alongside extending targeted relief, FSB has also called for an increase in the threshold for Small Business Rates Relief (SBRR) from £12,000 to at least £25,000, removing more than 250,000 small businesses from the rates system. Significant support could also be achieved by widening the tapering to cover a higher range of rateable values, creating a more generous ‘small business taper’.
The Non-Domestic Rating Bill – which on Monday went to the report stage in the House of Lords – should be more ambitious, making it easier and more attractive for businesses to invest and improve by extending or upgrading their property, the organisation said. Current proposals within the bill will ensure businesses in England making qualifying building improvements will not face higher business rates bills for 12 months, and FSB said this Improvement Relief should be extended to three years.
“While the business rates bill continues to work its way through the House of Lords this month, there’s a chance to make a real difference to ambitious small firms keen on investing in their properties, by extending Investment Relief to three years,” McTague said.
“For the cleaning supplies firm that wants to invest in new manufacturing space to take on bigger contracts, or the pub that has ambitions of serving more punters- this would be hugely beneficial. These small firms should not be stifled by the looming threat of higher business rates bills as a consequence of investment.”