The Federation of Small Businesses (FSB) is calling for rate relief to be extended for small businesses, which are increasingly “vulnerable” to mounting costs.
The 75 per cent rates relief discount for three business sectors — retail, hospitality and leisure — should be extended beyond the April cut-off, the FSB said. The discount is meant to provide tailored help to “hard-pressed” small businesses.
They said this extension would give “a lifeline to thousands of small firms in our town centres and on our high streets that are vulnerable to increasing costs”.
An increase in the threshold for Small Business Rates Relief (SBRR) is also being called for, from £12,000 to at least £25,000, which the FSB said would remove over 250,000 businesses from the rates system.
The Non-Domestic Rating Bill that is set to go through to the report stage today 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,” they added.
The Bill’s proposal is to enable growth for small businesses, ensuring those that make qualifying building improvements will not face higher rates for a year. However, the FSB is calling for this to be extended to three.
Martin McTague, FSB national chair, said there needs to be a “sea of change” among business rates as the “system is not fit for purpose and needs an urgent overhaul”.
There is room to make a difference this month for small businesses to invest in their properties, McTague said, whether it be “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”.
“These small firms should not be stifled by the looming threat of higher business rates bills as a consequence of investment,” he added.
At its Autumn Statement in 2022, the government announced a package of changes and tax cuts that was worth £13.6b over the next five years, containing measures to support business rates costs, including a freeze in the multiplier, extended relief, support, and an exchequer funded transitional relief scheme.
An HM Treasury spokesperson said: “The multiplier has been frozen for three consecutive years at an overall cost of £14.5 billion. We have also provided 75 per cent relief for retail, hospitality and leisure properties, a tax cut worth over £2 billion for around 230,000 businesses. All taxes are kept under review.”