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BUSINESSES AND COUNCILS WELCOME PLAN TO HELP SMALL FIRMS IN RURAL WALES

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Business and local authorities have welcomed new assembly proposals to cut rates bills for small firms in rural are...
Business and local authorities have welcomed new assembly proposals to cut rates bills for small firms in rural areas.

The Federation of Small Businesses in Wales and the Welsh Local Government Association joined together to give their approval to finance minister Edwina Hart's proposalsto extend the rural rate relief scheme in April 2002.

It is set to help out around 25,000 small businesses, many of which have been suffering as a result of the outbreak of foot and mouth disease.

FSB Welsh policy chairman Roland Sherwood said:

'We would like to welcome this move as a step in the right direction to helping out small rural firms at a very difficult time.

'At the moment, government figures show that small businesses hit by the foot-and-mouth crisis across the UK owe around£103m in deferred tax - a figure that is rising rapidly.

'The spiralling debt is giving us very real fears that thousands of small firms in tourism and agriculture-related industries could collapse as a result.

'The announcement should be a welcome shot-in-the-arm to many firms that will at least not have to pay as much business rates as they do now,' he said.

The WLGA's spokesperson on agriculture and rural affairs, Dai Lloyd Evans, said:

'The association welcomes this announcement from Edwina Hart. It sharply increases the number of small rural businesses that will get automatic reductions in their rates bills. The reductions are estimated to be worth£15m. This initiative forms an important plank in the regeneration of the rural economy. Reducing the contribution that councils have to make towards discretionary relief will also mean that councils can help more businesses than now.'

The WLGA's spokesperson on finance and best value, Russell Goodway, added:

'There was clear support - including from the WLGA - for the proposal in Simplifying the System for a scheme that would reduce rates bills for all small businesses in both urban and rural areas. The changes announced by Edwina Hart are a valuable first step towards that. We shall work with the Federation and the Assembly to secure changes to primary legislation that would benefit small businesses in our towns and larger villages.'

Notes

* In September 2000 the assembly cabinet published 'Simplifying the System', a consultation paper on the local government finance system. The association's response may be seen here.

* Business rates are collected by county and county borough councils.

* Rateable values are assessed by the valuation office agency while the poundage is set by the national assembly. Legislation requires that the bills of some ratepayers are reduced (mandatory relief). Councils have powers to grant discretionary relief in certain circumstances. 25% of the cost of discretionary relief has to be met from council tax at the moment but the assembly is reducing this to 10% from 1 April 2002.

* The definition of a rural area is settlements with a population of less than 3,000. The effects of the proposed changes to the rural rate relief scheme are as follows:

NowApril 2002

Sole general store or sole post officeRateable value up to£5000: 50% mandatory relief

Rateable value up to£10000:

Discretionary relief

Rateable value up to£6000: 50% mandatory relief

Rateable value up to£12000:

Discretionary relief

Pubs and petrol stationsRateable value up to£10000:

Discretionary reliefRateable value up to£9000: 50% mandatory relief

Rateable value up to£12000:

Discretionary relief

Other businesses

(except advertising hoardings, car parks, telecommunications masts, cashpoint machines, general stores, post offices and Crown properties)

Rateable value up to£10000:

Discretionary reliefRateable value up to£6000: 50% mandatory relief

Rateable value up to£12000:

Discretionary relief

Advertising hoardings, car parks, telecommunications masts, cashpoint machines, general stores and post offices (where they are not the sole general store or post office), and Crown propertiesRateable value up to£10000:

Discretionary reliefRateable value up to£12000:

Discretionary relief

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