The UK government’s announcement of an additional GBP1.25 billion to help support early stage businesses yesterday has been welcomed by SMEs, but some businesses are affected by a loophole in the scheme.
The UK government’s announcement of an additional GBP1.25 billion to help support early stage businesses yesterday has been welcomed by SMEs, but some businesses are affected by a loophole in the scheme.
Michael Niddam, managing partner at Kamet Ventures praised the announcement as a positive step by the government. “It is great to see the UK government providing support to our fastest growing startups. By providing this support it is sending a message to VCs that the government is committed to keeping the UK as the leader for innovation in Europe,” he said. “The extra funding for the grants programme will also help early stage research projects and keep the pipeline of new innovation strong.”
There are acute concerns regarding the way the scheme excludes certain segments of startup businesses, however.
There is a loophole which means that businesses that occupy serviced office space where rates are included (bundled into the serviced package) are not eligible for the Covid-19 support.
A petition signed by 11,900 UK small businesses angry at missing out on GBP1 billion worth of Covid-19 Small Business Grants will now be investigated by the Government.
“Put simply, if you don’t have a business rates account for your business with your local authority you get nothing. It’s a very unfair situation,” explains office expert Jonathan Ratcliffe from Offices.co.uk.
“Small businesses across the UK are absolutely fuming; and at no fault of their own, because their choice of office type dictated whether they got a GBP10,000 cash grant or not,” explained Ratcliffe.
Grants are awarded based on rateable value – a quick fix in unprecedented times which means that if your office had a RV of less than GBP15,000 you got a GBP10,000 cash grant to see you through.
“We are in no way criticising Chancellor Rishi Sunak, absolutely not, he’s had to make some complex decisions in a very short time period, it’s just that small businesses in shared workspaces have slipped through a loophole and missed this cash lifeline through no fault of their own,” said Ratcliffe.
The petition is asking the Government to urgently investigate the loophole which is unfairly penalising small businesses typically made up of one-10 employees in small serviced office spaces across the UK. If the petition reaches 100,000 signatures, it will be discussed in Parliament.
“GBP10,000 would have genuinely been a lifeline for our business. As it stands, that lifeline has been dangled in front of us and then taken away due to what can only be described as a gap in the policy,” said Piranavan Vimalraj, co-founder of ONE Global Mobility, based in a Regus office near Reading.
