A Private Members Bill is to be brought forward in the Houses of Commons that would see business rate relief granted automatically for small businesses.

Conservative MP Peter Luff has worked with the Federation of Small Businesses (FSB) on the legislation, which would ensure that small firms don't miss out on rate relief.

Over 50% of small companies miss out on the relief because they are not aware of its existence. The Local Government Association recently revealed that £400m was left unclaimed by businesses entitled to rate relief in 2006.

"Making these payments automatic would ensure the money gets directly to those who need it. It will be a boost to small businesses and even cut administrative costs for the local authorities that promote the availability of the rate relief," said MP Peter Luff.

"Rates are the third largest item of expenditure for small businesses after wages and rents, so this relief would make a huge difference."