Rates relief for small businesses

Around 64,000 businesses will see bills drop, the FSB said

Businesses in Wales should receive some relief from rates next year after the assembly government announced a decrease in the amount some will pay.

Small and medium enterprises had feared they were facing a hike in bills after a recent revaluation of premises which suggested rateable values would rise.

Now the Welsh assembly government has announced it is lowering the level at which bills are calculated.

The Federation of Small Businesses (FSB) has welcomed the announcement.

The FSB said many small and medium enterprises (SMEs) across Wales had recently received revaluation notices from the Valuation Office Agency which raised the rateable value of many businesses and suggested their bills would increase for the 2010-2011 period.

On Tuesday, the assembly government said it would lower the non-domestic rates multiplier (a set figure used in conjunction with a business's rateable value to produce its yearly rates) from 0.489 to 0.409.

Janet Jones, Wales chair of the FSB, said: "I want to give a cautious welcome to the news that the multiplier has provisionally been reduced for 2010, which will in essence mean that around 64,000 businesses in Wales will see a real-terms reduction in their business rates bill."

She said this was something the FSB has lobbied "long and hard for" and it was "pleasing" to see the government listening and helping SMEs.

"What is important is that the assembly makes this multiplier reduction and considers further measures to help SMEs in Wales using the business rates system - the only fiscal tool the assembly has at its disposal," added Ms Jones.

Relief scheme

An assembly spokeswoman said the assembly government did not have the power to delay the property revaluation exercise, which runs every five years, but had reduced the multiplier to help businesses through the recession.

She added: "The assembly government will also be changing the thresholds for small business rates relief so that the total pot of money available to small business is not reduced as a result of the revaluation exercise.

"It should also be noted that more than 45,000 businesses in Wales are currently benefitting from the assembly government's small business rates relief scheme, and around 20,000 receive other types of relief such as unoccupied property relief or charitable relief.

"This means that almost two thirds of business premises in Wales are currently receiving a reduction of at least 25% on their rates."

Conservative economy spokesman David Melding AM said while he welcomed any reduction in the multiplier "it will be of no comfort whatsoever if businesses face big increases in their rates next year as a result of revaluation."

"Businesses need to be reassured that the yield raised in business rates will not increase next year."