The upcoming Localism Bill will end the requirement for businesses to fill in an application form to claim the relief. Instead, the Small Business Rate Multiplier will automatically apply to eligible firms.

However, the Forum of Private Business is concerned that the Bill could jeopardise some of the £500 million per year that businesses are already able to claim, because ‘councils will be free to administer Small Business Rate Relief in a way that best serves local businesses and local needs’.

‘Removing the need to fill in a form to claim SBRR is only a positive if SBRR is genuinely made automatic, as it is in Wales,’ says Forum property adviser Andrew Bacon. ‘But that is not what is being proposed. It is now to be granted at the discretion of councils.’

Adds Bacon, ‘If the Localism Bill also makes councils collect extra rates under the Business Rate Supplement scheme in order to pay for SBRR, or allows them to keep what they collect in rates, granting SBRR becomes a budgetary decision for councils. If they don’t have the cash, or can’t raise it through the supplement, local businesses won’t get SBRR.’

Following its decision to increase SBRR from October 2010, the government hopes that making the relief automatic will help businesses access £200 million in rate relief unclaimed each year.