More than 3,650 small shops, pubs, restaurants will lose out on £15,000 of government grant funding following an “anomaly”, according to the Altus Group.
Last week, a payment of £3.4bn was made to councils to ensure that grants of up to £25,000 would reach businesses “as soon as possible” to help mitigate the impact of Covid-19.
The scheme was designed by reference to the business rates system and rateable values, with a lower qualifying threshold aligned to the small business rates relief scheme.
For smaller properties, including those with a rateable value below £12,000 that receive a full exemption from business rates, the cash grant has been set at £10,000.
The grant only rises to £25,000 for properties outside of the threshold for small business rates relief, with a rateable value over £15,000.
However, small properties with a rateable value of exactly £15,000 are at the threshold at which normal business rates become payable, and these are now being “constrained” to the lower grant funding despite having had “no benefit at all from small business rates relief since the 2017 revaluation came into effect”.
According to Altus Group there are 3,657 retail, leisure and hospitality premises in England with a rateable value of exactly £15,000.
Robert Hayton, head of UK business rates at Altus Group, said: “This is an anomaly and obvious unfairness in the design of the grant funding scheme.
“It is particularly harsh on those businesses occupying a property with a rateable value of exactly £15,000.”
He added: “With thresholds there will always be winners and losers and these are found at the upper end too.
“In this case, the problem could be substantially alleviated if the government also tapered the £10,000 and £25,000 grants on rateable values between £12,000 to £15,000 to acknowledge the tax contributions made towards local services.”