Representatives of small businesses have written to the chancellor calling on him to introduce business rates reform to help firms struggling with rising property costs.

The Federation of Small Businesses (FSB)’s Budget submission calls for a major reduction in business rates bills for small firms, as thousands struggle to stay afloat amid spiralling operating costs.

The group recommends that the Retail Discount – which allows small retailers with rateable values of up to £51,000 to claim a 33% discount on their rates bills – be increased to at least 50%, made permanent and extended to small firms operating in other sectors, including manufacturing.

It also called for the threshold for Small Business Rates Relief to be increased from £12,000 to at least £30,000.

FSB national chairman Mike Cherry described business rates as an ‘unfair, regressive tax’.

‘Small businesses have been left hamstrung by uncertainty for the past three years. We need to see the chancellor step-up to the mark next month with measures that will reinject optimism into the small business community and enable growth. Otherwise, we’re in for a very bleak winter.

‘Business rates reform must be a priority. This unfair, regressive tax – which hits firms before they’ve made their first pound in turnover, let alone profit – continues to threaten the futures of small firms all over the country.

‘We’ve secured important business rates mitigations in the past, but now is the time for a significant reduction in small business bills.’