Business rates break for small firms in Wales

The announcement has been welcomed by business groups

Around half of small businesses in Wales will pay no business rates for the year from October, the assembly government has announced.

Business groups have expressed fears that rate increases would hamper the economic recovery.

Local Government Minister Carl Sargeant said the scheme would be a "boost" for small businesses across Wales.

It is claimed some firms could save up to £1,200 but opposition parties say the move comes too late.

The minister has agreed that the measure announced for England by the chancellor in his budget speech will apply in Wales.

For the first time in Wales around half of businesses from October will pay no business rates whatsoever. Simon Evans, Federation of Small Businesses Wales

Mr Sargeant said: "Around half of small businesses in Wales will pay no business rates for the year from 1 October 2010 and roughly 20% more will see their business rates significantly reduced.

"This is a real boost for small businesses across Wales. Most will get help with their rates and will see savings of up to £1,200."

The assembly government will increase the rateable value threshold at which properties qualify for 100% relief to £6,000.

It will also introduce a "taper band" of relief of between 100% and 50 % up to a rateable value threshold of £12,000 for one year from 1 October 2010.

'Very good news'

The Federation of Small Businesses (FSB) Wales welcomed the announcement as "very good news".

Simon Evans of the FSB said: "For the first time in Wales around half of businesses from October will pay no business rates whatsoever. That's never happened before."

Graham Tayler from the Welsh Association of Self-Catering Operators said the announcement was "very good news" for people who run self-catering properties as businesses.

But Gordon Barry of Narberth's Chamber of Trade said that while the announcement was welcome, it did not go far enough for the Pembrokeshire town.

Revaluation

Mr Barry said that of 48 businesses on Narberth High Street, 31 will not be affected.

Welsh Conservative Leader Nick Bourne criticised what he said was the assembly government's delay in acting to alleviate the business rate burden on firms.

He said: "Today's announcement, while welcome, comes far too late for many firms which have either gone bust or face big rises in business rates as a result of revaluation."

"Firms will still have to pay the higher rates for six months until this scheme comes into effect and may not get that money back."

Liberal Democrat economy spokesperson Jenny Randerson said it was good the government had listened to small businesses and ensured fair play between England and Wales.

She added: "This should just be the start to building a new, fairer Welsh economy based on small businesses.

She also called for "a Welsh Stock Exchange to help small businesses develop and new ways of making sure ideas from Welsh universities stay in Wales".

The Federation of Small Business said they will continue to press the case for areas where particular difficulties with business rates remain.