Easier rates payment scheme could be hit by admin problems

A scheme aimed at helping firms pay their business rates may face delays because of problems in implementing it.

Under the scheme, which was announced in the Budget, firms have the chance to spread payment of the latest 5 per cent increase in business rates over a period of three years.

Business rates are determined each April in line with the Retail Prices Index rate of inflation as it stood in the previous September.

Last September inflation was running at 5 per cent but has since dropped significantly.

To assist businesses with the increase and any cash flow problems it may impose, the government introduced a scheme that enables firms to apply to their local council to delay paying 3 per cent of their rates bill for 2009/10.

Businesses that have been hit by an even larger rise in their rates bill as a result of the end of transitional relief can request to defer 60 per cent of the increase.

The scheme took effect as from 31 July by when local authorities were meant to have written to businesses informing them of the relief.

The Local Government Association believes that the majority of councils have managed to get the letters out in time.

However, processing the applications may not run so smoothly as the Department of Communities and Local Government has been reported as finding only one software solution capable of handling the complex rates calculations involved. Councils have been told of the delay by the Department.

Businesses that apply may have to wait a number of weeks before they benefit from the tax break.

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