A big increase in the amount of business rates collected highlights how much pressure small firms are under, an industry group has said.

Business rates collected last year increased by almost £900 million to £25.3 billion, official figures showed.

The Federation of Small Businesses (FSB) said it was concerned that such a huge amount of money was still being collected from small firms, hitting them when there’s so much political uncertainty and rising business costs.

FSB chairman Mike Cherry said: “Business rates are not linked to the ability to pay and hit firms before they’ve had the chance to make their first pound of turnover, let alone profit.

“The system should be balancing the need to fund public services with protecting our vibrant small business community.

“These latest figures show a huge leap in the amount of business rates collected, rising £2 billion in just three years, with the total now over the £25 billion mark.

“With business costs rocketing, employment burdens weighing heavy, and lingering political uncertainty, small businesses really are feeling the pressure.

“Small firms should not be used as cash cows.

“Instead, local authorities should be competing to create low-tax, pro-business landscapes to attract more entrepreneurs.

“It’s vital small firms are not squeezed even further, forcing some to leave our high streets and town centres altogether.

“With all eyes on the race for prime minister, candidates need to set out need to set out a clear plan for how they will back the UK’s 5.6 million small businesses and address the mounting challenges they face.”