by business editor Trevor Sturgess

Small firms and shops are set for a cash windfall after a Government pledge to make business rate relief automatic.

Business rates, which are collected by local councils on behalf of Whitehall, are the third largest cost to many smaller enterprises after rent and wages.

But many do not know that they are entitled to relief. Every year, millions of pounds earmarked by the Treasury for eligible businesses go unclaimed.

The Federation of Small Businesses (FSB) has been campaigning for the change and the Government has given the go-ahead to a change that could help half a million businesses across the country.

The FSB hailed the announcement as a real win. The 7,000-member FSB in Kent and Medway has signed accords with several local councils across Kent and hopes they will ease the relief process.

Chairman Roger House said it was welcome news.

"We have long been calling for small business rate relief to be made automatic and this cash injection will be of great help to many small businesses," he said.

"The onus is now on councils to be creative and not needlessly make small businesses go through an application process when it is obvious they are eligible.

"We have developed excellent relationships with councils though our small business engagement accord and we will be urging them to use their new powers to ensure that all small businesses receive the relief that they are entitled to."

Small businesses are generally entitled to small business rate relief if they occupy only one property and the rateable value of that property is less than £18,000.