Small companies have till the tip of August to claim up to £1.6bn in unspent grants by way of the Government’s COVID-19 emergency assist schemes.
Business secretary Alok Sharma has written to native authorities asking them to return £1.6bn in presently unspent grants issued by way of both the £25,000 retail, leisure and hospitality scheme or the separate £10,000 scheme for companies eligible for small enterprise charges aid by Friday, August 28.
This is regardless of hundreds of companies that have utilized for grants nonetheless ready for the cash to hit their accounts.
>See additionally: How to get the federal government’s £10,000 money grant for small companies
Two schemes value £12.4bn have been set up in March to present funds by way of the enterprise charges system as Britain went into lockdown.
Shops, accommodations, eating places and different leisure companies whose premises’ rateable worth – which determines how a lot industrial property tax they pay – is between £15,000 and £51,000, are eligible for a £25,000 grant by way of the Retail, Hospitality and Leisure Grants Fund.
Separately, any enterprise qualifying for small enterprise price aid or rural charges aid is eligible for a grant of £10,000 by way of the Small Business Grant Fund (SBGF), as is any enterprise in the retail, leisure or hospitality business whose property is valued at lower than £15,000 for enterprise charges.
A 3rd £617m Discretionary Fund was launched in May to assist about 10,000 small companies that don’t pay enterprise charges immediately, however relatively pay them by way of a landlord corresponding to these in shared workspaces.
>See additionally: Local Authority Discretionary Grants Fund – the way it may help your corporation
While this later “discretionary” funding has been closely oversubscribed, as of July 13 £1.58bn of the first grant funding had gone unspent, largely due to guidelines which capped how a lot chain shops may claim for his or her properties.
John Webber, head of score at Colliers International, a property advisory agency, stated the unspent grants from the primary two schemes ought to be used to assist hundreds of small companies which missed out on the discretionary funding, which he stated had failed.
Colliers estimates that there are 6,000 companies in London alone in serviced workplace area that weren’t in a position to entry the unique SBGF. These have been counting on the discretionary grant to be the reply to their prayers.
Bizarre state of affairs
Webber stated: “We have had a bizarre scenario where there are some areas of the country with still ‘too much grant’ to pay out, such as Cornwall who has paid out £235m of its whopping £281 million grant, but other parts of the country where the grant allocations were simply not big enough.”
For instance, Colliers stated that Manchester had obtained £5.4m to distribute by way of its discretionary fund, sufficient to assist solely about one in 30 of small qualifying companies.
The deadline for the schemes’ closure may imply hundreds of firms in serviced workplaces nonetheless ready for the Government’s valuation workplace company to decide their enterprise charges standing additionally may miss out, Webber stated.
Webber added: “It’s been a postcode lottery as to how and if a business actually managed to benefit from these grants. In terms of the discretionary grant fund, unlike receiving funds from the SBGF, businesses also had to evidence a loss of income resulting from COVID-19 to receive grant monies, and different boroughs gave different deadline dates and conditions for applications. It’s been confusing and inconsistent.”
Find your small enterprise coronavirus grant – record of UK councils