More help needed for Greenwich & Woolwich’s small firms during the recession

From Spencer Drury, PPC for Greenwich & Woolwwich

Call to make business rate relief automatic for small firms
 
Cllr Spencer Drury, Parliamentary Spokesman for Greenwich and Woolwich, this week welcomed Conservative plans to cut taxes and paperwork for small shops and small firms. In a new initiative, small business rate relief would be given automatically to firms across England, rather than businesses having to claim it and complete time-consuming forms. This comes as Parliament discusses a Conservative Private Members’ Bill to change the law in this way.
 
Small business rate relief was introduced in 2005, allowing small firms to claim up to 50 per cent off their business rate bills. However, firms have to fill out paperwork to claim the rate relief, despite the fact that Whitehall’s tax inspectors know precisely which firms are eligible for it.
 

  • According to the most recent figures, 1,051 firms claimed small business rate relief in Greenwich.
  • The Local Government Association has estimated that some 870,000 firms are eligible for the rebate but less than half have claimed. The take-up rate is estimated to be 34% in London.
  • By contrast, in Wales, small business rate relief has been automatic since 2007.

 

After rent and staff, business rates are typically the next biggest cost to local firms. Business experts have warned that 32,300 businesses will fail in 2009. Firms face a hammering this April from the Government thanks to soaring business rates:

  • Business rates are to rise by 5.0 per cent in April 2009, despite RPI inflation forecast to be negative this year, due to a statistical quirk in the way business rate rises are calculated.
  • Transitional relief from the 2005 business rates revaluation has expired, pushing up bills further for many firms in April 2009.
  • The Government has slashed rate relief on empty properties. As the recession bites, firms are unable to rent out vacant property, and have to pay rates in full without any income from rent.

 
Spencer said:
“Small shops and businesses across Greenwich and Woolwich are facing tough times in Labour’s recession. These firms, from our corner shops to local pubs, are the lifeblood of our local community. A responsible government would do more to help them.
 
“Yet Gordon Brown is making it as difficult for small firms to claim the tax relief to which they are entitled. He is compounding their misery by finding new ways to drive up business rates by stealth.
 
“Conservatives would ensure that small firms automatically receive rate relief, cutting their paperwork and tax bills and giving many of them a fighting chance to stay afloat.”