Support growing for automatic small business relief

By Alex Stevenson

Pressure is growing on the government to support a private member’s bill making business rate relief automatic.

Conservative backbencher Peter Luff’s bill would make the relief automatic, helping around half of all small businesses who are eligible but do not apply.

In addition to the Federation of Small Businesses (FSB), which is effectively sponsoring the bill, a range of other public affairs organisations have rallied behind it, including Unison, the National Federation of Subpostmasters and the Campaign for Real Ale.

“You’ve got to get a huge body of people on board,” Mr Luff told politics.co.uk.

“My expectation was that the government would embrace this bill warmly. It would be embarrassing for them [to oppose it] – it would not be good politics. But we will wait and see,” he added.

Local government minister John Healey will meet with Mr Luff over the bill to address concerns over its implementation.

But it is already in place in Wales and Scotland and Mr Luff proposes maintaining the current upper threshold of qualification. This makes relief available for all properties which have rateable values of less than £2,200 – and the total value of all properties is under £15,000.

According to accountancy firm BDO Stoy Hayward around 34,000 small businesses are expected to close in 2009.

As small business rates are often the third highest expenditure item after wages and rent, the FSB says, the £2,500 of relief on offer can have a real impact on the firm’s finances.

“It’s a genuinely modest measure – but one which I hope will make a difference,” Mr Luff continued.

“The FSB made a very powerful case for the bill. These small businesses are extremely vulnerable to small change in their financial situation. We have to make sure every single thing we can do, we do.”

The bill must win government support to stand a realistic chance of becoming law. But it has already received a boost: its second reading is now on March 6th, effectively taking it up to second in the list of private member’s bills.