The government must extend relief to small firms under the new system of business rates, the Federation of Small Businesses (FSB) urged today.
It says recent big increases in properties' rateable values, which go some way to determine business rates, will push rates beyond a level that small firms can afford, especially retailers in affluent areas.
The group says small firms feel the pinch of business rates more sharply than larger firms, claiming that for a business with a turnover £50,000, business rates represent 7.7% of sales, but for those with a turnover of £500,000 it is 1.4%.
It gives the hypothetical example of shops in the South East of England, which face an average 29% increase in rateable value, which could mean an increase of about £1,800 in final rates bills.
Meanwhile a factory in the West Midlands can look forward to a 6% rateable value increase, which actually represents a reduction of £150 in their bill.
The increases will not only spell increased rates for many small businesses, says the FSB, but will also drag many small firms out of the threshold for Small Business Rates Relief - which can give a discount of up to 50%.
Roger Culcheth, FSB business rates chairman, said: "Business rates are often the second or third highest outgoing small firms face. Rates can be the difference between success and failure.
"The government must act now to right this disparity and support small business. It should extend small business rates relief to all business premises with a rateable value of less than £25,000."