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Rates dilemma

Forbes facing new decision on small firms funding

Kate Forbes, SNP digital minister

Kate Forbes: pressure to match new grant (pic: Terry Murden)

Finance Secretary Kate Forbes is under new pressure to match the latest funding support for small firms announced by the UK government.

Small firms which do not pay business rates, such as those operating in shared spaces, will benefit from a new fund announced by UK Business Secretary Alok Sharma.

Mr Sharma and Westminster minister for regional growth and local government, Simon Clarke, told local authorities in England yesterday that £617 million would be made available.

This additional fund will include small businesses which do not have an individual business rates assessment and pay an ongoing fixed service charge which covers all costs, including rent and rates.

In a statement issued today, the Department for Business, Energy and Industrial Strategy, said: “We are asking local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates.

“But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.”

Businesses must have fewer than 50 employees, and be able to demonstrate that they have seen a significant drop of income due to Coronavirus restriction measures.

There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. Local authorities will have discretion to make payments of any amount under £10,000. It will be for councils to adapt this approach to local circumstances.

There was no immediate response from the Scottish government on whether it would match the fund for businesses north of the border.

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Ms Forbes has already conceded a need to amend the grants paid to businesses with more than one property, although a group of small firms have had their request for a Judicial Review of this decision approved by a Judge.

Jonathan Ratcliffe, of shared offices group, said: “It’s great news – small businesses who were reaching the end of their cash reserves will be able to save their businesses using this cash grant.

“They’d missed out because they paid their business rates to their serviced office provider, not direct to the Local Authority – it looks like this has been put right – we are over the moon – the campaigning worked.

UPDATED 6 May: Colliers International, the real estate firm, has called on the Scottish Government to remove the block on businesses in some serviced offices accessing COVID-19 grants.

It has written to Ms Forbes asking for flexibility in its approach to businesses that have fallen through the cracks. The firm looks after a significant proportion of the Scottish serviced office market, including WeWork and IWG.

Louise Daly, associate director, who leads Colliers International’s rating team in Scotland said: “The Scottish Government must take action to give such businesses access to much-needed grants. In the first instance, local councils, responsible for handling the grants, must be informed that these are exceptional cases. 

“Serviced office providers can easily be identified, on a building by building basis, which will allow tenants to claim the grants they so desperately need.

“We have offered to work with the Scottish Government to bring clarity to this issue, so that this anomaly can be resolved as quickly as possible.”

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