Accountancy firm warns: Small firms failing to claim £400m of rate relief


A leading North West accountancy firm is warning small businesses not to miss out on a key recession busting tax break after figures revealed that more than £400m in Small Business Rate Relief (SBRR) is going unclaimed each year.

Mitchell Charlesworth has offices in Liverpool, Manchester, Warrington, Widnes and Chester. Partner Paul Durrance said in the North West only a quarter of eligible firms are applying for SBRR. He said that in England, small businesses are entitled to SBRR if the rateable value of their premises is below £12,000. Special rules apply for businesses that own more than one property, but with a total rateable value below this limit.

Mr Durrance said critically businesses with a rateable value of up to £6,000 will pay no business rates and this was extended by a year to September 2012 in the March Budget. This means that eligible ratepayers will receive SBRR at 100 per cent on properties up to £6,000 rather than 50 per cent. A tapering relief from 100 per cent to 0 per cent will also be in place for properties over £6,000 and up to £12,000 in rateable value for that period.

"SBRR is a terrific tax break for recession stricken small firms," he said. "However, many business owners are unaware of the tax break and historically hundreds of millions have been left unclaimed with the North West being one of the worst regions with only a quarter of eligible firms entering a claim. If you think you could qualify it is vital to contact your accountant urgently to ensure you do not miss out on a penny of cash you could save."

Mr Durrance said many of the North West's 440,000 plus small firms are paying too much tax due to the complex nature of the tax regime, poor finance skills, and a lack of knowledge about tax relief schemes.

"It's not surprising that business owners are struggling when Britain has one of the most complicated tax systems in the world," he said. "More than 500 pages of new tax law are created each year. That is why here at Mitchell Charlesworth we urge small firms not cut corners on finance. Common mistakes which cost firms include incurring fines for late filing of accounts; failing to claim Business Rate Relief and ignorance of opportunities such as the 'Time to Pay' scheme, which allows companies unable to pay their tax bill to spread payments.

"For these reasons we would strongly urge small firms to find an entrepreneur friendly accountant who can help you week in week out with accounts acting like a virtual finance director. In the long run it will slash your tax bill, boost your bottom line and avoid basic errors that could damage or even break a small business."

For further information Email: Paul.Durrance@mitchellcharlesworth.co.uk or call any member of the Mitchell Charlesworth tax team in Liverpool: 0151 255 2300 Manchester: 0161 817 6100 Chester: 01244 323051 Warrington: 01925 635141 Widnes: 0151 423 7500

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