Small business rate relief forms to be scrapped

To help increase take up, the government is proposing to scrap the legal requirement for ratepayers to fill in an application form.

“We want to see as many small business ratepayers as possible claim their tax cuts, so we’ll change the rules so councils can administer the scheme without being caught up in unnecessary government red tape,” says Eric Pickles.

Business rates are the third largest cost to most small firms and many are currently unaware that they’re entitled to rate relief.

Under current rules, small businesses in England are entitled to small business rate relief if they occupy only one property, and that the rateable value of the property is less than £18,000 (or £25,500 in London). All businesses that meet these criteria are eligible to have their rates calculated using the small business rates multiplier.

But the upcoming Localism Bill will remove the legal requirement for ratepayers to submit an application form.

The government intends to give councils the freedom to administer small business rate relief themselves, and is proposing to change the law so that all eligible businesses automatically have their discounted bills calculated using the small business multiplier.

By giving councils more power over business rates, Eric Pickles hopes it will incentivise them to promote local economic growth.

“We will let councils set discounts locally, and we’re considering proposals to let them keep what they collect,” Eric Pickles continues. “This will give councils a genuine financial stake in their local economy and let them target their support at local shops, pubs, post offices and startup enterprises.”

Business organisations welcome the change. John Walker, national chairman of the Federation of Small Businesses, says: “This is welcome news. We’ve long been calling for small business rate relief to be made automatic, and this cash injection will be of great help to many small businesses.”

In October, the government announced that over half a million businesses would get double their usual small business rate relief.

A total of 530,000 small businesses with rateable values up to £12,000 will receive double their normal discount for one year, a move which will save them a total of £390m. Approximately 345,000 of those businesses – with rateable values up to £6,000 – will pay no rates at all.

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