The Federation of Small Businesses (FSB) is collaborating with a conservative MP to propose legislation which would make business rate relief payments to small business insurance customers automatic.
Peter Luff, MP for Mid Worcestershire and chairman of the Business and Enterprise committee, came fourth in the ballot for private members' bills and will use the opportunity to put forward the FSB's proposals.
According to the organisation, over half of small business insurance customers miss out on the rate relief because they are unaware of it.
Small firms which have a rateable value of less than £15,000 - or below £21,500 in Greater London - can claim back up to half of the business tax they pay.
"With around 85 small businesses closing a day, this move would provide vital support to businesses on the high street struggling with cashflow," said Roger Culcheth, chairman of the FSB's local government committee.
Last week, the organisation welcomed the government's £1.3 billion fund for small firms, which it said it had been campaigning for since October.
