Council set to move quickly to support small businesses which don’t qualify for grants

WARRINGTON Borough Council is set to move quickly to secure the future of many small businesses in the town which currently don’t qualify for Government grants, to help them survive during the coronavirus crisis.

After failing to receive a response to an earlier letter sent more than two weeks ago, Council Leader Cllr Russ Bowden has written to the Secretary of State for Business Energy & Industrial Strategy, Alok Sharma MP, stating that “unless directed otherwise” the council will start to make payments to businesses that don’t currently meeting criteria set by the Department for Business, Energy and Industrial Strategy.
Cllr Bowden says he fears failure to act now could signal the end of many small important SME businesses in Warrington.

In his letter Cllr Bowden wrote: “I appreciate you will be receiving significant correspondence at this time, however I wanted to follow up on the letter I sent to you on 14 April 2020, to which I’ve not yet received a response.
“In the meantime the issue is getting more important, and I fear that failure to act now could be the end of many of our important SME businesses in Warrington. Therefore in the absence of a response from yourself and unless you direct us otherwise, we intend to start making payments to small businesses that are outside of the criteria currently set by BEIS.
“We acknowledge the most recent announcement over 100% government-backed loans to small businesses, and we await the detail on this scheme, however still nothing has been done to address those businesses that operate out of shared or serviced offices. Indeed, the most recent guidance on payment of Small Business Grants specifically mentions these businesses as not qualifying for any grant. As I previously wrote, these businesses are often not self-employed and so cannot claim support from HMRC based on previous years. We are aware of businesses where they have been caught in the middle of VOA split assessments, and with local knowledge we can assess and choose to pay grants to some businesses in advance of formal VOA notification. However, I am now having brought to my attention instances where the VOA has previously advised landlords to not split their buildings for rating. Whether or not this was to simplify matters for the VOA, it is now a decision that is coming back to haunt many small business tenants.
“We are now proposing to pay out a small business grant based on our assessment of a pro-rata of floor area, and that the Government should support this approach with appropriate additional grant funding to enable payments of Small Business Grant to this category of businesses without having to rely on the VOA in splitting business rates. This issue is not confined to Warrington – it is a national. We do not have any more time to waste in waiting for decisive action and failing to support local SMEs.
“Where businesses are in properties eligible for SBRR, there is no incentive or requirement for that business or landlord to ensure that they are the liable party. So there are a significant number of instances where we have been unable to pay the grant which would otherwise be due if that liability was confirmed.
“Warrington has one third of its business rates properties in the category eligible for SBRR, i.e. below £15k. Although we regularly review SBRR, there is no regulation or requirement for the business to be registered with us.
“Even with the early analysis that we have undertaken in Warrington, there will be categories of businesses that need more financial support, but are currently excluded. As a minimum, we would request that the following areas are addressed:
· Small microbusinesses which do not operate from a physical location or are mobile and therefore cannot access support;
· Small businesses occupying co-working space, shared workspace where rates are included as part of their overall service charge;
· Businesses that occupy separate designated office space and within their tenancy/ licence agreement pay a contribution to the shared business rates in managed workspace/incubators/university spin-offs where a rateable value is applied to the whole building. This is often advised as the most appropriate method for business rates collection by the Business Rates Office when tenancy agreements are easy in and out and would mean a lot of change in billing.
· A business that occupies the whole of an eligible property for a grant but pays the rates via their landlord who is the named rates payer and can access the grant.
· Low value or small business activity that takes place in larger properties above the grant rateable values thresholds and therefore do not qualify for a grant.
· Charities that have no retail element but miss out on a small business grant because they get Charitable Rates Relief rather than Small Business Rates Relief.

Cllr Bowden added: “I appreciate that the Government’s response to Covid-19 cannot always be an absolute science, and there will be anomalies in any scheme to support businesses, but there really needs to be a reconsideration of some of the big flaws in the current scheme, and we would ask that these are addressed as a matter of urgency.
“As an immediate action we would request that you introduce a grant for all small businesses who do not pay business rates. This would include people who work from home and businesses who make a contribution to business rates as part of a payment to their landlord.”