07 November 2008
By Paul Dicken
The government is facing increasing pressure to offer further support to local businesses through business rate relief, as a survey showed companies were having difficulty paying the tax. The Local Government Association carried out a snapshot survey of 48 councils during August and September. Over half of local authorities had seen a fall in the collection, while 19 councils reported an increase in take-up of small business rate relief. To support firms in their areas, the LGA has called on councils to buy local wherever possible, urged small businesses to contact town halls to claim rate relief and said the government should give councils more power to give payment breaks to small firms in trouble. LGA chair Margaret Eaton said: ‘There is a whole range of ways that councils can help small local businesses. From small business rate relief to buying local where they can, town halls can make a huge difference. The importance of small businesses to a thriving local economy cannot be underestimated’. A spokeswoman for the Federation of Small Businesses said there was a lack of awareness about Small Business Rate Relief and business were discouraged by the red-tape around applying. The FSB also believe the relief should be applied automatically. This position is shared by the British Chambers of Commerce. A spokeswoman said the ‘government could potentially automate receipt of this support’, while local authorities could use the flexibility in payment times to delay payments, if this was done fairly. The FSB have also called on the government to scrap the subscriber fee for the public procurement website Supply2.gov.uk to widen access to potential contracts. A spokeswoman for the Department for Communities and Local Government told Public Finance that department ‘would always encourage small businesses to apply for small business rate relief’ and that it was the role of councils to promote it. ‘Take-up rates will vary across the country, depending on the number of businesses who qualify for the relief. Not all small properties are occupied by small businesses, and a business may not qualify for relief if they occupy more than one property.’ The government is also facing pressure from the BCC and the British Property Federation to reverse changes to the empty property rate relief regime introduced in April this year which restricted payment exemptions. The DCLG spokeswoman said there were no plans ‘to reverse the changes to empty property rate relief. ‘But as with all taxes we will keep the position under review. Any decisions on taxes are a matter for the chancellor,’ she added.
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