The FSB is calling for the government to extend its rates relief scheme. It claims that small businesses are suffering disproportionately from business rates.
Small firms feel the pinch of business rates more sharply than larger firms. For a business with a turnover £50,000, business rates represent 7.7% of sales, but for those with a turnover of £500,000 it is 1.4%.
The 2005 business rates revaluation looks set to compound the problem, with high increases in rateable values (from which the overall rates bill is derived) for retailers, and especially those in affluent areas.
For example, a shop in the South East of England faces an average 29% increase in its rateable value, which could mean an increase of about £1,800 in the final rates bill. In Brighton some traders are facing three-fold increases.
Meanwhile a factory in the West Midlands can look forward to a 6% rateable value increase, which actually represents a reduction of £150 in their rates bill.
The widespread increases in rateable values will not only spell increased rates for many small businesses but will also drag many small firms out of the threshold for Small Business Rates Relief - which can lead to a discount of up to 50%.
FSB Business Rates Chairman Roger Culcheth said ,"Business rates are often the second or third highest outgoing small firms face. Rates can be the difference between success and failure.
"The government must act now to right this disparity and support small business. It should extend small business rates relief to all business premises with a rateable value of less than £25,000."
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Federation of Small Businesses