Small businesses in the UK could lose out on up to £200 million in tax relief, the Department for Communities and Local Government (DGLC) has warned.

According to the DGLC some local authorities are following outdated central government guidance that imposed a deadline of yesterday for small business rates relief claims.

In 2006 the department introduced an updated timetable that ensured applicants had a three-year deadline to apply for small business rates relief.

This meant that small businesses had until 2010 to apply for tax relief for 2007-08, which can be worth up to £1,100 per individual business.

A number of council websites and application forms state that those businesses who missed yesterday's deadline would not be able to claim for this year.

The rebate was first issued in 2005 and almost 900,000 UK firms are eligible, although the Local Government Association revealed that only half of this number have submitted claims.