The Federation of Small Businesses (FSB) has called for a new 100 per cent business rates relief scheme for childcare providers in England.
Publishing its response to the Treasury Committee’s business rates inquiry earlier this month, the business body said changes must be made to reflect the “mounting cost pressures on the sector”.
This includes the rising funding gap for the 30 hours of free childcare entitlement, as well as rising staff costs.
The FSB said these two issues have crippled the property-dependent sector, who are coming up against “spiralling business rates”.
While the figures suggest that the move could cost the Treasury some £120 million each year, similar measures in both Scotland and Wales have already helped the struggling industries there survive.
In a second recommendation, the FSB has also called on the Government to remove a “quirk” in the business rates system which is “penalising small businesses” who wish to expand their bricks and mortar-based business.
Under the current regime, a business who moves into a second location loses 100 per cent of its small business rates relief – even if the combined rateable value of both buildings is below the £15,000 threshold.
Commenting on the report, FSB National Chairman Mike Cherry said: “The business rates system remains regressive and is not linked to a business’ ability to pay. While we’ve worked hard for rates discounts this year, a huge amount of further reform is needed.
“Most small business owners have seen an increase in their operating costs in the last few months, and the childcare sector is no exception.
“In fact, the vast majority of childcare providers are small, independent setups, which must meet strict requirements; maintaining staffing levels, having a certain amount of space on site, paying for up-to-date training and being able to deliver the 30 hours entitlement. On top of this, utilities, rent and business rates bills are placing significant pressure on their costs.”
Want to know more? Find the Treasury Committee’s business rates inquiry here.