Small firms struggling to access bailout grants

Many thousands of the UK’s smallest businesses are at risk of missing out on vital bailout grants from the Government because local councils are unable to contact them to distribute the funds.

Any small firm in receipt of small business rate relief or rural rate relief may be eligible for a grant from their local authority to help them through the coronavirus outbreak. The funding has begun in earnest this month, with the handouts being allocated via the existing business rates system to expedite the process.

However, there appears to be a significant flaw in the procedure, given that most local councils don’t typically harvest financial and contact information on small businesses that don’t have to pay business rates.

This is thought to include firms eligible for rate relief that were established after the relief’s introduction in 2005 and its reform in 2010.

Several local authorities are posting letters to these business owners and, in some instances, visiting their premises. However, the COVID-19 lockdown means that all but a handful of smaller firms have closed their doors altogether or are operational exclusively online. Subsequently, councils are struggling to make all entrepreneurs aware of their eligibility for the cash.

Councils are having to use alternative means of tracking down owners, using Companies House as a point of reference to obtain vital contact details. However, this protracted process threatens to delay the grants that are most needed to small firms with minimal cash reserves.

A spokesperson for the Local Government Association (LGA) said: “Councils are leading local efforts to support communities and businesses as they try and cope with the coronavirus outbreak.

“They stand ready to ensure business reliefs and grants reach those who need them as quickly as possible.

“The LGA is working with the Government on how to overcome the administrative challenges councils face.”

These latest roadblocks come just a few days after the Chancellor had to intervene and scrap a key feature of the Business Interruption Loan Scheme, giving businesses easier and quicker access to vital loans from high-street banks.

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Last updated: 23rd September 2020