Government gives extra help to small firms which missed out on £10,000 business rates grant

Date published: 04 May 2020

The Business Rates loophole – which meant small businesses in shared office space missed out on a critical £10,000 cash grant – has been plugged with a new £617 million funding scheme announced on Saturday (2 May).

The Department for Business, Energy, Innovation & Skills (BEIS) has confirmed the additional funds will be given to Local Authorities in England to support businesses in shared spaces, regular market traders and small charity properties.

The cash grant will be distributed at the discretion of each Local Authority and the exact terms of the grant will be confirmed over the next few days.

The following criteria must be met by those claiming it:

  • Businesses must employ under 50 staff
  • Businesses must also be able to demonstrate that they have seen a significant drop of income due to coronavirus restriction measures

This funding plugs the loophole which meant that companies which do not have a business rates account with their local authority get nothing. If a business occupies serviced office space where rates are included (bundled into the serviced package and paid via the landlord), it was not eligible for the Small Business Grants Fund (SBGF) or the Retail, Hospitality and Leisure Grants Fund (RHLGF).

Leader of Rochdale Council and cabinet member for finance, Allen Brett, said: “We welcome this announcement, which we’ve lobbied hard for, alongside other councils across Greater Manchester.

“It means that we will be able to use any funding we have left over from existing coronavirus grant monies to support these additional businesses which are not covered under the existing schemes, but which nevertheless have on-going costs and have been financially impacted by the virus. If we use up the cash left in this pot, we can apply for a small top up grant from government.

“We don’t as yet have any detail from government as to how this scheme will work and any exclusions, so we are not able to make payments as yet. Our teams are working hard behind the scenes to identify businesses which could be eligible and we will update our website as soon as the government guidance comes through. Businesses which may be eligible for this additional support which have already been in touch with us will be contacted in due course.”

MP for Heywood and Middleton, Chris Clarkson said: “Over the past few weeks my office has been helping eligible businesses right across the constituency to access the government's small business grant scheme. Whilst we have been able to help most businesses with the general support measures, there were some with special circumstances that didn't meet the criteria, but still needed our help.

“For this reason, I am glad that the government has now made that help available, with a new £617m business grant 'top-up' fund aimed at helping businesses that don't meet the general criteria.”

Local councillor Faisal Rana, who wrote to the Chancellor Rishi Sunak asking for additional help for the excluded firms, said: “I’m delighted the government has moved so quickly to sort out this anomaly. Frankly, it was a bit of a mess. But now scores of Rochdale businesses will now qualify for help that would otherwise have gone bust.

“I’m extremely pleased that these small firms will now not miss out. A number contacted me saying they have had to close because of the coronavirus crisis but couldn’t pay bills and were in danger of going to the wall.

“Many of these small businesses are essential to the local community and are vital the economic wellbeing of our borough. It was unfair they were not entitled to the same help as other firms and I’m glad that this has now been put right.”

Chris Fletcher, Policy, Campaigns and Communications Director at Greater Manchester Chamber of Commerce, said: “On the face of it this is really positive and for a significant number of businesses this offers a huge amount of relief in these very challenging times. Amongst other issues for many businesses, not being named as the registered business rate payers was causing all sorts of problems as they couldn’t receive any of the agreed grant funding from local authorities.

“This new scheme, if delivered as it should be, will close that gap and will give some businesses hope as well as much needed cash in the bank. This economic crisis is about cashflow, this scheme will help. Hopefully the criteria is flexible enough to help and easy enough to apply for and get rapid results. I know a lot of our members, other businesses and ourselves have been calling for this for some time and this is a positive step forward.”

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