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Giving local businesses an Easter tax break

Local Government Minister Bob Neill is writing to every local council today urging them to make sure every single local firm in their areas …

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Local Government Minister Bob Neill is writing to every local council today urging them to make sure every single local firm in their areas knows about all the Government measures available to give businesses a tax break and the breathing room to grow and prosper.

Small shops and businesses are at the centre of the local economy and the Government is determined to make sure the support on offer to hundreds of thousands of firms is taken up so they can thrive.

Government has doubled small business rate relief for two and a half years so the average tax benefit is around £1650; the Localism Act now makes it easier for firms to claim the relief they are entitled to; given councils the power to offer their additional local discounts; and allowed businesses to spread the inflation increase over three years.

The call to councils comes on the day the application for business rates deferral scheme opens. This gives thousands of local business the opportunity to delay paying some of this year’s rates bill for up to three years worth potentially £600 million if all English firms, covering over one and a half million businesses properties, took up the offer.

The deferral scheme offers businesses a much needed tax break making a real difference to running costs, help them to get on top of cash flow and giving time to adjust to inflation changes.

44,000 business properties in Birmingham could defer over £11 million; Bristol has 14,000 properties, Liverpool and Sheffield with 16,000 each could defer over £5 million; Manchester has 22,000 properties eligible for up to £8 million; Newcastle’s 9,000 could get discounts worth £4 million; Plymouth has almost 7,000 that could save over £2 million; and London businesses could benefit from a £165 million reprieve across 285,000 properties.

Bob Neill said:

Small shop and firms are at the heart of our communities, and it has never been more important to support them as they help rebuild and re-grow this country’s economy for the future. We have set up all these rate reprieves because we know local firms need a little more breathing space to make ends meet.

The Coalition Government has taken action to make sure there are a series of measures in place that support businesses and promote economic growth. It is vital that councils make sure every firm in their area know about the offers available - like the fact that our Localism Act means the double discount for small firms, worth millions, is now easier to claim than ever before, or that there is a three year interest deferral out there - so they are taken up.

The other business rates support available is as follows:

  • Small Business Rate Relief has been doubled for two and a half years. This tax break is typically worth £1,650 over the period. Around half a million small firms and shops are eligible for over three quarters of a billion pounds worth of discount. Around 330,000 will pay no rates at all over this period. In some areas as many as two in five firms are eligible.

  • New local discounts are available through the Localism Act so councils can actively target their own businesses rate discounts in the best way for local businesses. This can be used to encourage new business investment, support for local shops, the high street or community services. Councils should consider this new power alongside the Government’s ‘Portas Pilots’ plans.

  • The 24 Enterprise Zones can give one hundred per cent discounts to new businesses to their sites for five years. Authorities are responsible for providing the discounts using the new local discounts powers. Central Government is meeting the costs of the discount.

  • Cancelled £175 million of unfairly backed business rates liabilities that affected many firms including those in ports. Hundreds of port-based businesses facing thousands of unfair and unexpected backdated business rates bills can breathe a sigh of relief as Government action to waive and repay their bills has finally lifted their heavy debt burden which threatened thousands of British jobs.

  • A £10 million High Street Innovation Fund is available to a hundred local authorities to support empty properties on our high streets, and those areas affected by the riots, helping kick start new business and revive neighbourhoods.

In recognition of the vital role of local authorities have in nurturing new enterprise supporting local business the Government is changing the way they are funded so they retain a share of their local business rate growth. Those councils that encourage local growth and enable firms to succeed will see the fruits of their labours returned to reinvest in the local area.

To further boost to locally driven economic growth the Government last week announced it’s ‘Portas Plus’ response the Mary Portas High Street. This includes a help package that rewards creativity and innovation and gives local people a genuine stake in the success of their towns.

Further information about the business rate discounts available is on the Business Link website: (external link). Business Link is Government’s online resource for businesses that contains essential practical information, support and services business whether a large organisation or a new start up.

Notes to editors

  1. The regulations to implement the spreading the Retail Price Index increase in business rates bills over three years have now been laid. This will give businesses the chance to defer payment of 3.2 per cent of their 2012-13 rates bills until 2013-14 and 2014-15. The legislation stipulates that provided ratepayers return the application by 9 June 2012 they will see the reduction in their July 2012 instalments. This allows sufficient time for authorities to update their software and prepare for the scheme. Local authorities will no doubt wish to take every opportunity to promote this scheme to ratepayers. Council town centre managers are being encouraged to make the deferral application form and helpful fact sheet available to local firms. Details of how much this scheme is potentially worth in every area can be found here: (Excel, 110kb). 

  2. Local areas from all parts of the country are getting additional help, worth on average £1650 over the period for each qualifying firm. Eligible businesses occupying property with a rateable value of up to £6,000 pay no rates for that period, with tapering relief up to a rateable value to £12,000. Government has also made it easier for authorities to get the relief to ratepayers by removing the legal requirement for ratepayers to submit an application form.

  3. All parts of the country are getting the double discount help - nearly 6,000 small firms in Bradford are getting the discount; nearly 5,000 in Durham, 2,000 in Harrogate; over 1,500 businesses in Enfield; Wakefield nearly 3,500; Shropshire 3,700; Sheffield 4,400; and Kirklees has over 5,000 small businesses getting relief. In Cornwall over 10,000 business properties are receiving discounts; with 3,000 in Bournemouth; while Suffolk Coast, North Norfolk, Poole, Southend, South Lakeland, Blackpool and Scarborough are helping over 2000 properties each. More details about the number and share of small firms and shops, for every area of the country, that received a rate reprieve are available here: (Excel, 205kb).

  4. More information on the Government’s response to the Portas High Street Review can be found here:


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Published 4 April 2012